Lithia & Driveway (NYSE:LAD) continued its aggressive expansion into high-growth U.S. markets on Tuesday, announcing the acquisition of two dealerships that bolster its presence in both the luxury and volume segments.
The Medford, Oregon-based automotive retailer has acquired Toyota of Gallatin in Tennessee and Mercedes-Benz of Medford in Oregon.
The deals mark the company’s official entry into the competitive Nashville metropolitan area and reinforce its "hometown" dominance in Medford as the firm celebrates its 80th year in business.
The acquisitions are expected to contribute approximately $225 million in annualized U.S. revenue.
Lithia, which has increasingly focused on diversifying its brand mix, financed the transactions using existing on-balance sheet capacity, signaling a reliance on internal liquidity rather than new debt in a shifting interest rate environment.
The move comes as large-cap auto retailers seek to consolidate a fragmented market, targeting regional hubs where population growth remains robust.
Nashville has become a primary target for retailers due to its economic tailwinds, while the Medford acquisition secures LAD’s grip on its home territory with a high-margin luxury brand.