Lithia has signed a revised agreement on improved terms with the Board of Directors of Pendragon to enter into a strategic partnership with Pinewood Technologies buy Pendragon’s UK motor division and vehicle management division.
Under the revised terms, Lithia has increased the total cash consideration versus its original offer announced on 18 September by 42%, to £397m and has increased the overall certainty of the transaction by removing certain completion conditions.
The new offer is worth 35.4 pence per share tp Pendragon shareholders.
with significant upside expected from the strategic partnership and North American joint venture opportunity.
Lithia said the additional cash consideration is expected to increase the cash dividend payable to Pendragon’s existing shareholders 49% to 24.5 pence per share.
Existing Pendragon shareholders will continue to retain approximately 83.3% ownership in Pinewood Tech and a share in a valuable joint venture to expand Pinewood’s software into the North American market.
Lithia has obtained preliminary commitments from a number of dealer groups to contract and roll out the Pinewood dealer management systems (“DMS”) to their locations, representing approximately 7,500 users.
Bryan DeBoer, Lithia & Driveway President & CEO, said: “Our transaction provides considerable value and certainty for Pendragon shareholders while unlocking Pinewood’s ability and massive potential as a standalone, pure-play SaaS business.
“We have a pathway to reach completion quickly, proven experience in successfully integrating businesses and great growth opportunities for the Pendragon employees. We are very excited about the strength of our strategic partnership and expanding the Pinewood business not just in the UK but around the world.”