Pendragon, the British engine sales firm, has announced its plans to sell its whole engine and leasing small business to Lithia Motors for £250 million ($309.six million). As portion of this deal, Pendragon will adjust its name to Pinewood Technologies PLC and enter into a strategic partnership with Lithia. The company’s Pinewood division, which operates its personal dealer management computer software, will come to be a stand-alone entity and concentrate solely on computer software-as-a-service.
In addition, Pendragon and Lithia have agreed on the terms of their strategic partnership. This incorporates bringing Pinewood’s small business to Lithia’s current 50 UK web-sites and generating a joint venture to accelerate Pinewood’s entry into the North American dealer management computer software market place. To assistance this partnership, Lithia will subscribe for 279.four million new ordinary shares in Pendragon for £30 million.
The transaction is anticipated to deliver shareholders with a money dividend of about £240m. This will consist of a money dividend of 16.5p per share, a retained 83.three% ownership in the going concern (initially valued at about ten.3p per share) and a direct interest in the North American joint venture (initially valued at about , six pence per share).
All round, this strategic move by Pendragon aims to streamline its operations and concentrate on its computer software small business, when also benefiting from its partnership with Lithia.