NEW YORK, June 15 Lithia Motors Inc said
on Sunday it has agreed to buy DCH Auto Group Inc for $362.5
million, giving the automotive retailer a presence in the
eastern United States for the first time.
DCH Auto Group's 27 dealerships sell new and used vehicles
in Southern California, New Jersey and New York, and the
purchase is expected to increase Lithia's 2014 earnings by about
12 cents to 14 cents per share, excluding acquisition costs, and
by 65 cents to 75 cents on an annualized basis, Lithia said in a
Oregon-based Lithia Motors, which calls itself the eighth
biggest U.S. automotive retailer with 101 stores, will acquire
100 percent of DCH Auto Group's outstanding shares for $340
million in cash and $22.5 million in shares. Lithia had a market
value of $2 billion as of the end of trading on Friday, and has
101 stores in the Western United States.
"For the past several years, we have been seeking a
strategic partner to help us to enter the Eastern United
States," Lithia President and Chief Executive Bryan DeBoer said
in the statement.
The acquisition is expected to close in the fourth quarter
of 2014 and is subject to customary approvals. The DCH stores
will keep their name and current management team with DCH
President George Liang to report directly to DeBoer. DCH founder
Shau-wai Lam is expected to join the Lithia board after the
transaction is completed, DCH said in a statement.
(Reporting by Marcy Nicholson)