Lithia Motors (NYSE:LAD) recently made a significant move by acquiring Elk Grove Subaru in California, a strategic step that bolsters its footprint in the Sacramento area and reinforces its presence in the Southwest region. This latest addition further expands the company’s regional network and is projected to contribute an impressive $100 million in annual revenue. With this acquisition, Lithia Motors’ total acquired annualized revenue for the year now stands at an impressive $180 million. The exact financial details of the deal were not disclosed by the company.
In order to finance this strategic acquisition, Lithia Motors utilized its existing on-balance sheet capacity, drawing from its substantial cash reserves. As of December 31, 2024, the company held a significant $445.8 million in cash and equivalents. Commenting on the acquisition, Bryan DeBoer, President and CEO of Lithia & Driveway, expressed, “This addition enhances our presence in the Southwest region and aligns with our overarching strategy of expanding our network in collaboration with top-tier partners such as Subaru.”
In addition to this transformative acquisition, Lithia Motors also announced a substantial increase in its share repurchase authorization, boosting the total available funds to around $748 million. In the current year, the company has already repurchased over 197,500 shares, amounting to $71 million at an average price of $361 per share. This represents approximately 0.75% of the outstanding shares. The market response to these developments was reflected in the company’s stock performance, with LAD shares displaying a marginal decrease of 2.24% to $318.03 at the latest trading check on Tuesday.
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