Lithia Motors Inc. last week took a significant step toward reaching its expectation to add $4 billion in revenue in 2023 via acquisitions, with the purchase of 14 franchised dealerships from Dennis Ellmer of Priority Auto Group in Virginia.

The June 12 Priority Auto acquisition, which included domestic, import and luxury brands, is expected to add $1.2 billion in annual revenue, Lithia said. The auto retail giant 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.

Lithia CEO Bryan DeBoer told Automotive News this month that the auto retailer “should come in around $4 billion” of added revenue in 2023 and that its acquisitions under contract were all in the U.S.

That would mean Lithia has to acquire dealerships representing about $800 million more in revenue this year.

“This deal seems in line with management’s strategy of prioritizing accretive M&A in this market,” Stephens Inc. analyst Daniel Imbro wrote in a June 13 note to investors.

Ellmer, who stayed on with Lithia and remains CEO of Priority Auto, separately retained two Lexus stores, Tom Dobry, Lithia’s vice president of strategic operations, confirmed to Automotive News in an email.

A Lithia spokesperson said Ellmer reached out to the company directly and no brokers were involved in the transaction.

The acquisition, which also included two buy-here, pay-here dealerships, two vehicle buying centers and a certified used-vehicle store, bolsters Lithia’s presence in Virginia, which the auto retailer considers part of Region 5, the Northeast. It had just two dealerships in Virginia, representing luxury and exotic brands, near Washington, D.C.

Priority’s stores are spread across the Chesapeake, Hampton and Newport News, Va., markets, plus near Washington, D.C. It also has one location in the southwest part of Virginia.

The acquisition included three dealerships each of Toyota and Honda, two Chevrolet stores, a Nissan store, a Nissan-Mazda dealership and one each of Infiniti, Acura, Hyundai and Ford.

“It’s a great group of stores,” said Mike Sims, president of buy-sell firm Pinnacle Mergers & Acquisitions in Frisco, Texas. “Once again, a great acquisition for Lithia to continue to build out” its footprint.

The transaction marked Lithia’s first U.S. dealership acquisition of 2023 and this year’s biggest deal so far in terms of the number of dealerships acquired, as tracked by Automotive News.

DeBoer this month said 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.

DeBoer noted Lithia’s focus areas for future acquisitions are in its Southeast, South Central and North Central regions.

Lithia, of Medford, Ore., ranks No. 1 on Automotive News‘ list of the top 150 dealership groups based in the U.S., retailing 271,596 new vehicles in 2022. Lithia’s sales figures include dealerships outside the U.S.