MEDFORD, Ore. -

Lithia Motors boosted its dealership presence in its home state on Monday, acquiring the O'Brien Auto Group of Salem in Salem, Ore.

Group officials said the stores now will be named BMW of Salem, Honda of Salem and Volkswagen of Salem.

Lithia expects these stores will add $110 million in estimated annual revenues.

“We are pleased to expand our presence in Lithia’s home state of Oregon,” Lithia president and chief executive officer Bryan DeBoer said.

“These stores fit our strategy of seeking exclusive franchises in the markets we serve,” DeBoer continued. “The opportunity to deepen our relationship with manufacturer partners like BMW, Honda and Volkswagen is a key to achieving our acquisition growth objectives.”

When asked by investment analysts about growing the size of its store network during a conference call on its first-quarter performance, DeBoer said there is probably three-fold rise in the number of available acquisitions.

At the time, DeBoer said Lithia is taking a deliberate approach and the president and CEO explained why.

“The problem lies in that earnings have come back,” DeBoer said. “The multiples that were being paid during the recession were large multiples of five, six, seven times. Now that earnings are two or three times what they were in the recession, the amount of dollars it costs to buy a dealership isn’t quite as attractive.”

DeBoer acknowledged that Lithia usually considers 20 acquisition possibilities before making a move, “which shows you that the pricing is still a little out of whack.”

While the group added three more stores this week, is Lithia ready to make more acquisitions?

“I’m actually more optimistic because there are so many more leads out that than there were three months ago,” DeBoer said back in April. “Again, when prices are high in our size markets because we don’t have a lot of competition with other buyers, we can kind of sit back. That will help bring the price back into our (return on equity) comfort level.

“It might take a little bit more time but I would definitely say there has been an acceleration of the last three months,” he went on to say. “I think we can expect something in the coming months and quarters.”

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