Filing Flows › Lithia Motors (LAD) › Takeover & LBO
Is Lithia Motors (LAD) a takeover target?
A leveraged buyout at today's price plus 30% ($403.20 a share) would return about 5% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $193.55 a share (−38% against today's $310.15). Historically 3.2% of companies with its figures were bought within a year (0.64× the average).
The buyout, step by step
| Entry | Amount | How |
|---|---|---|
| Offer price a share | $403.20 | today's $310.15 plus 30% |
| × shares | 22.0 million | |
| = Equity value | $8.9B | |
| + Debt refinanced | $9.8B | |
| − Cash | $108M | |
| + Other claims | $26.2M | preferred stock, minority interests |
| = Enterprise value | $18.6B | 9.8× EBITDA of $1.9B |
| Fees | $372M | 2% of the price |
| New debt | $10.4B | 5.5× EBITDA at 7.65% a year; the limit that binds: 5.5× EBITDA |
| Buyer's own money | $8.5B | 45% of the cost |
5 years under the buyer
| Year | Revenue | EBITDA | Interest | Free cash flow | Debt left |
|---|---|---|---|---|---|
| Year 1 | $38.8B | $1.9B | $798M | $515M | $9.9B |
| Year 2 | $39.6B | $2.0B | $758M | $552M | $9.4B |
| Year 3 | $40.5B | $2.0B | $716M | $595M | $8.8B |
| Year 4 | $41.5B | $2.1B | $671M | $645M | $8.1B |
| Year 5 | $42.8B | $2.1B | $621M | $701M | $7.4B |
The exit and the buyer's return
| Exit | Amount | |
|---|---|---|
| Exit multiple | 8.7× EBITDA | today's trading multiple, before any premium |
| Enterprise value at exit | $18.5B | |
| − Debt left | $7.4B | |
| = Buyer's equity | $11.1B | |
| Money multiple | 1.30× | on $8.5B put in |
| Buyer's yearly return (IRR) | 5.4% |
Price against return
What the buyer makes at other premiums over today's $310.15; the IRR reaches 20% at $193.55 a share.
| Premium | Price a share | Buyer's IRR |
|---|---|---|
| 10% | $341.17 | 9.2% |
| 20% | $372.19 | 7.2% |
| 30% | $403.20 | 5.4% |
| 40% | $434.22 | 3.8% |
| 50% | $465.23 | 2.3% |
The figures used
| Figure | Amount | |
|---|---|---|
| Revenue, last 12 months | $38.2B | |
| EBITDA, last 12 months | $1.9B | 5.0% of revenue |
| Depreciation and amortization | $350M | |
| Capital spending | $346M | |
| Debt | $9.8B | |
| Cash | $108M | |
| Share price | $310.15 | on Nov 6, 2026 |
Fixed rules, the same as the interactive view's starting point: the shares are bought at today's price plus 30%, the company's debt is refinanced and fees take 2%. New debt is the least of 5.5× EBITDA, 65% of the price and the amount whose interest EBITDA covers 2 times, at 7.65% a year (SOFR 3.89% plus the high-yield B spread 3.26% plus 0.5%, rates of Oct 15, 2026). Revenue grows 1.6% in the first year — the company's own rate, held between −3% and +8% — fading to 3% by year 5; the EBITDA margin, depreciation and capital spending stay at today's share of revenue; working capital takes 10% of each year's added revenue; tax is 26% of profit after interest. Every dollar of free cash flow repays debt. After 5 years the buyer sells at today's multiple of EBITDA.
What a takeover could cost
Takeovers on record paid a median premium of 32.5% over the share price before the deal (the middle half 20% to 51.8%), according to the 1,437 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, Lithia Motors would cost about $410.96 a share, $9.0B for all its shares.
| Premium | % | Price a share | All shares |
|---|---|---|---|
| Low end (a quarter of deals paid less) | 20% | $372.19 | $8.2B |
| Median | 32.5% | $410.96 | $9.0B |
| High end (a quarter paid more) | 51.8% | $470.82 | $10.4B |
The odds, from history
Historically 3.2% of companies with its figures were bought within a year (0.64× the average). Its figures put it in decile 3 of 10 (10 = the most likely to be bought). The odds come from a model of every merger proxy, tender-offer response and going-private statement filed on EDGAR since 2011, set against each company's size, margins, debt, cash flow and growth the year before.
Lithia Motors' latest quarter
Lithia Motors, Q3 2026: revenue $9.9B (+3% year over year), operating margin 4.2%, net earnings $293M, operating cash flow −$30.8M. The chart follows the revenue to costs, profit and cash.
Questions
Is Lithia Motors being acquired?
No headline, 8-K or 13D about a sale is on file in the last year.
Could private equity buy Lithia Motors?
A leveraged buyout at today's price plus 30% ($403.20 a share) would return about 5% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $193.55 a share (−38% against today's $310.15).
What would a takeover of Lithia Motors cost?
Takeovers on record paid a median premium of 32.5% over the share price before the deal (the middle half 20% to 51.8%), according to the 1,437 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, Lithia Motors would cost about $410.96 a share, $9.0B for all its shares.
Updated Nov 8, 2026. Read automatically from SEC filings and public data; errors are possible. Not investment advice.