LONDON: Pinewood.AI, a leading cloud-based software provider for the automotive retail sector, has agreed to acquire Lithia UK Holdings Limited’s 51% stake in Pinewood North America LLC for $76.5 million, the company announced today.
The deal, structured through the issuance of 14,560,691 new ordinary shares in Pinewood.AI at 386.5 pence per share, values the joint venture at $150 million. The share price reflects the 30-day volume-weighted average preceding the announcement.
Strategic Expansion in North America
The acquisition grants Pinewood.AI full control over its North American operations, removing what executives called a “competitor overhang” that had deterred other dealership groups from adopting its software. The move is expected to accelerate growth in the $6.5 billion North American automotive dealer software market.
As part of the agreement, Pinewood.AI will enter into a five-year contract with Lithia Motors to deploy its Pinewood Automotive Intelligence™ platform across all of Lithia’s U.S. and Canadian dealerships by the end of 2028. Once fully implemented, the deal is projected to generate approximately $40 million in annual recurring revenue, potentially rising to $60 million with additional North America-specific applications.
Independent Valuation Supports Deal
The acquisition price was validated by an independent valuation from Kroll, LLC, which estimated the fair market value of Lithia’s stake at $73 million to $86.1 million. The assessment was based on projected cash flows from Lithia’s dealership roll-out.
Leadership Perspectives
Bill Berman, CEO of Pinewood Technologies Group plc, said the deal strengthens the company’s position in a key growth market.
“Assuming full control of the joint venture will allow us to capitalize on the opportunities in North America,” Berman said. “We are on track to pilot our platform in Lithia’s U.S. stores in late 2025, with full deployment starting in 2026.”
Bryan DeBoer, CEO of Lithia Motors, called the agreement a step forward in modernizing automotive retail.
“As Pinewood.AI’s largest global customer, we are excited to support their expansion while enhancing our own digital transformation,” DeBoer said.
Transaction Details and Next Steps
- Consideration: $76.5 million, paid in newly issued Pinewood.AI shares.
- Lock-in Period: Lithia is restricted from selling the shares for two years.
- Expected Completion: Q3 2025, pending customary conditions.
The deal simplifies Pinewood.AI’s corporate structure and consolidates revenue reporting, improving financial transparency.
Background
Pinewood.AI, formerly Pendragon PLC, shifted to a pure-play SaaS model after selling its UK motor and leasing divisions to Lithia in February 2024. The North American joint venture was established to adapt Pinewood’s software for the U.S. and Canadian markets.
With the acquisition, Pinewood.AI aims to challenge dominant legacy players in the $2.4 billion U.S. dealership management systems (DMS) market.
Financial Snapshot
- Joint Venture Net Assets (Dec. 2024): £19.5 million.
- Pinewood.AI’s Share of Loss (2024): £0.5 million.
The transaction has been approved by Pinewood.AI’s independent directors, who see it as a catalyst for long-term growth.
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