Pinewood.AI and Lithia Motors: A Strategic Acquisition for North American Expansion

Pinewood.AI's Strategic Move to Strengthen North American Presence

In an important strategic decision, Pinewood Technologies Group plc, known as Pinewood.AI, has announced its agreement to acquire a 51% stake in the North American joint venture from Lithia UK Holdings Limited. This transaction is valued at $76.5 million and will significantly enhance Pinewood's operational capabilities within the automotive retail sector of North America, allowing it to fully embrace the market's potential.

The acquisition will be realized through the issuance of 14,560,691 new ordinary shares, valuing the entire joint venture at an estimated $150 million. This shift to full ownership is poised to eradicate any barriers and streamline Pinewood's broader adoption of its innovative Pinewood Automotive Intelligence™ platform across North America, which is projected to become a $6.5 billion industry.

Bill Berman, CEO of Pinewood Technologies, expressed optimism regarding this acquisition, stating, “The US and Canada are central to our growth strategy. Full control of the joint venture strengthens our ability to capitalize on numerous opportunities in this key strategic growth market.”

This move is accompanied by a five-year contract with Lithia that affirms the deployment of Pinewood Automotive Intelligence™ across all current and future Lithia dealerships. This rollout is anticipated to be completed by the end of 2028. The contract also includes an agreed-upon pricing structure for Lithia’s continued use of Pinewood.AI's services.

Once operational, Pinewood.AI estimates it will generate around $40 million in recurring annual revenue, which could surge to approximately $60 million depending on the additional features developed tailored for the North American market before the end of the five-year contract.

Pinewood's integration within Lithia's network signifies not just a business arrangement, but a collaborative effort to modernize and enhance customer experiences across their retail ecosystem. Bryan DeBoer, President and CEO of Lithia Driveway, remarked on this partnership, “Each of our global stores is committed to the Pinewood Automotive Intelligence platform, and we are excited to see the rollout across our North American network.”

Pinewood Technologies, operational since 1981, is recognized for its role in delivering secure, cloud-based software solutions tailored for automotive retailers and Original Equipment Manufacturers (OEMs). With a workforce exceeding 200 employees, Pinewood serves over 35,000 users across 21 countries, establishing its footprint firmly on a global scale. Following a previous sale that made it an independent entity, Pinewood is now turning its focus to North America, eyeing a significant entry via the established joint venture with Lithia.

As the auto industry increasingly shifts towards digital and data-driven solutions, Pinewood.AI’s acquisition comes at a crucial juncture. The transformed partnership not only strengthens Pinewood’s market position but also aids Lithia in its quest to become a fully integrated, data-driven retailer. With the automotive sector evolving rapidly, this acquisition positions both companies to benefit from mutual growth and innovation.

In conclusion, the move by Pinewood.AI to acquire a majority stake in the Lithia joint venture signals a robust strategy for expansion within the North American market, leveraging cutting-edge technology to redefine consumer experiences in automotive retail. With definitive timelines set for the rollout of technological integration, the automotive landscape is poised for an exciting transformation over the coming years.