Lithia Motors Inc. confirmed it bought a majority of Virginia’s Priority Auto Group —14 dealerships — from Dennis Ellmer on Monday, but the transaction did not include the group’s two Lexus dealerships.
Ellmer is staying on with Lithia and will remain CEO of Priority Auto, Tom Dobry, Lithia’s vice president of strategic operations, confirmed to Automotive News in an email.
Ellmer separately retained the two Lexus stores, Dobry said.
The transaction marks Lithia’s first U.S. dealership deal of 2023 and even without the Lexus stores, marks this year’s biggest deal in terms of the number of dealerships acquired, as tracked by Automotive News.
The acquisition builds off Lithia’s small footprint in the Mid-Atlantic state and gives the auto retailer a sizable presence throughout Virginia.
The acquired dealerships in the Chesapeake, Hampton and Newport News, Va., markets include Priority Toyota Chesapeake, Priority Infiniti of Greenbrier, Priority Acura, Priority Hyundai, Priority Chevrolet Chesapeake, Priority Honda Chesapeake, Priority Toyota Hampton, Priority Honda Hampton, Priority Chevrolet Newport News and Priority Ford Norfolk.
Lithia also bought three dealerships near Washington, D.C.: Priority Nissan Chantilly, Priority Mazda-Nissan Tysons in Vienna and Priority Toyota Springfield, plus one store in the southwest part of Virginia, Priority Honda Roanoke.
The dealerships’ names remain, Lithia said.
The acquisition also included two buy-here, pay-here dealerships, two vehicle buying centers and a certified used-vehicle store, all in Virginia.
“We look forward to continued growth with Lithia for years to come,” Ellmer said in a statement.
Lithia on Tuesday said the acquisition is expected to add $1.2 billion in annual revenue. Lithia said it has acquired dealerships representing $3.2 billion in annual revenue so far in 2023, most of which stems from its March purchase of Jardine Motors Group in the United Kingdom.
“This deal seems in line with management’s strategy of prioritizing accretive M&A in this market and we have heard from other players in the industry about purchase multiples coming down,” Stephens Inc. analyst Daniel Imbro wrote in a note to investors Tuesday.
Lithia CEO Bryan DeBoer told Automotive News last week that the auto retailer’s network development, or acquisition, target for its plan to reach $50 billion in annual revenue by the end of 2025 is now $25 billion in acquired revenue, up from the previously stated $20 billion.
Priority Auto, of Chesapeake, ranks No. 55 on Automotive News‘ list of the top 150 dealership groups based in the U.S., with sales of 14,447 new vehicles in 2022
Lithia, of Medford, Ore., ranks No. 1 on that list, retailing 271,596 new vehicles in 2022. Lithia’s sales figures include dealerships outside the U.S.
