Pinewood.AI to acquire Lithia’s North America stake for $76.5m as it targets full rollout by 2028

Pinewood Technologies Group plc (LSE: PINE | OTCQX: PINWF), a UK-based automotive cloud software provider, announced it has entered a definitive agreement to acquire the 51% majority stake in its North American joint venture from Lithia Motors Inc. (NYSE: LAD) for $76.5 million. The transaction, which will be settled through the issuance of 14,560,691 new ordinary shares in Pinewood.AI, marks a major milestone in the firm’s North American expansion plans.

The deal values the entire joint venture at $150 million and immediately grants Pinewood.AI full ownership of its platform operations across the United States and Canada. Alongside the acquisition, Pinewood.AI and Lithia signed a five-year agreement that will see the Pinewood Automotive Intelligence™ platform deployed across all current and future Lithia locations in both markets by the end of 2028.

This move comes as Pinewood.AI targets the $6.5 billion automotive software market in North America, aiming to expand its dealer management system (DMS) platform and enhance revenue visibility through full consolidation. Analysts see the transaction as a key catalyst for recurring revenue growth and structural clarity as Pinewood.AI strengthens its SaaS footprint in the highly fragmented retail automotive technology space.

Why is Pinewood.AI acquiring Lithia’s North America stake now?

The acquisition provides Pinewood Technologies Group full operational and financial control of its North American business, which had previously been co-managed through a joint venture with Lithia’s UK subsidiary. The firm stated the deal eliminates structural barriers to broader adoption, simplifies its reporting structure, and enables full revenue recognition from the expanding client base.

Previously part of Pendragon PLC, Pinewood Technologies became an independent entity in 2024 after Lithia Motors acquired Pendragon’s UK automotive and leasing businesses. That transaction included the formation of a North American joint venture between Pinewood and Lithia, allowing both firms to co-develop and localize DMS capabilities for the U.S. and Canadian markets.

With that foundational work now largely complete, Pinewood.AI’s management believes full control will accelerate growth and support broader platform rollouts. Pinewood Technologies Group CEO Bill Berman described the move as “a significant milestone” in Pinewood’s North American growth strategy.

“The US and Canada are central to our expansion goals,” Berman said. “Through the joint venture, we’ve built and validated our platform in-market. This acquisition allows us to take the next step—scaling quickly and removing limitations on deployment.”

What does the five-year Lithia deployment deal include?

As part of the agreement, Pinewood.AI and Lithia signed a five-year contract that will see the Pinewood Automotive Intelligence™ platform implemented across all of Lithia’s existing and planned dealerships in the U.S. and Canada by the end of 2028.

The phased rollout is expected to begin with pilot programs at U.S. locations in the second half of 2025. A full-scale deployment is scheduled to start in 2026 and continue through 2028, with pricing terms for Lithia’s usage also agreed as part of the contract.

Once deployment is complete, Pinewood.AI expects to generate approximately $40 million in annual recurring revenue (ARR) from Lithia’s usage of its platform. With additional features tailored for North America set to launch by the end of 2028, this ARR figure could rise to approximately $60 million.

The $150 million valuation for the joint venture, independently supported by advisory firm Kroll LLC, was based on this projected ARR and the strategic value of Pinewood.AI’s DMS platform layered across Lithia’s footprint.

How does this acquisition affect Pinewood.AI’s financial position and structure?

By acquiring full ownership of the joint venture, Pinewood.AI gains the ability to fully consolidate the venture’s revenue, expenses, and assets on its balance sheet. This improves financial transparency and eliminates the need for minority interest accounting, which had previously diluted visibility into North American operations.

The share-based consideration—rather than a cash payout—also preserves liquidity on Pinewood’s balance sheet. Issuing 14.56 million new ordinary shares represents a dilution of approximately 5–6% of current shareholders, but market participants see the tradeoff as favorable given the long-term revenue and strategic benefits.

Institutional analysts covering Pinewood.AI’s London-listed stock expect the transaction to improve gross margins over time as software deployments scale, and to strengthen Pinewood’s case as a vertically integrated, cloud-native automotive platform developer with global reach.

What does this mean for Lithia & Driveway?

For Lithia Motors Inc., the transaction is both a divestment and a strategic alignment. While the Oregon-based automotive retailer is selling its controlling stake in the joint venture, it remains Pinewood.AI’s largest global customer and a key institutional partner.

Lithia President and CEO Bryan DeBoer emphasized that the deal deepens their relationship with Pinewood.AI and supports Lithia’s long-term digital transformation.

“This agreement supports our vision to modernize customer experiences across our ecosystem,” DeBoer said. “We are committed to deploying Pinewood’s platform across North America and accelerating our evolution into a fully integrated, data-driven retailer.”

Lithia will continue to hold a minority equity interest in Pinewood.AI and has signaled it will remain engaged in product development, co-innovation, and roadmap alignment. As part of its global omnichannel strategy, Lithia intends to integrate Pinewood’s cloud software across multiple business lines—including fleet management, vehicle subscriptions, and consumer financing.

How does the Pinewood Automotive Intelligence™ platform compete in the US and Canada?

Pinewood’s platform is a fully cloud-native, end-to-end dealer management system that supports operations across sales, aftersales, accounting, inventory, CRM, and compliance. It has been developed collaboratively with OEMs and dealer groups and is currently used in over 21 countries.

Unlike legacy DMS systems that require on-premise support and modular add-ons, Pinewood’s unified solution provides integrated workflows with real-time analytics and API-based customization. This makes it especially attractive to large dealer groups like Lithia looking for scalable solutions.

With more than 35,000 users globally and partnerships with over 50 OEM brands, Pinewood Technologies Group has already demonstrated its ability to scale in complex multi-brand environments. Analysts view its entry into the North American market as timely, as U.S. dealerships seek to replace outdated systems and support hybrid retail models.

How are investors and institutions reacting to the deal?

Investors responded positively to the announcement, citing clarity on monetization timelines and the strategic importance of the U.S. rollout. Institutional sentiment indicates that the five-year commercial deal could become the cornerstone for Pinewood.AI’s broader expansion across North America, potentially leading to other regional partnerships with top-100 dealer groups.

Sell-side analysts note that Pinewood.AI’s recurring revenue visibility and strong client retention offer favorable fundamentals, especially when compared to smaller, verticalized SaaS peers. Some equity research desks have also flagged potential upside if Pinewood expands to other large dealer networks following the successful execution of the Lithia rollout.

The joint venture buyout also demonstrates Pinewood’s ability to navigate cross-border transactions and maintain high-value client relationships beyond initial launch stages—a key differentiator in the competitive automotive SaaS market.

What’s next for Pinewood.AI after this transaction?

Following the completion of the acquisition and issuance of new shares, Pinewood.AI will shift its focus toward executing a phased deployment strategy across North America. The plan begins with pilot programs in select U.S. dealerships during the second half of 2025, allowing the company to validate system integration and operational readiness.

A full-scale rollout of the Pinewood Automotive Intelligence™ platform is scheduled to commence in 2026, gradually expanding to all current and future Lithia locations. By the end of 2028, Pinewood.AI also expects to introduce North America-specific features designed to meet regional regulatory requirements and optimize dealer performance in the U.S. and Canadian markets.

CEO Bill Berman confirmed the company is “on track” to meet all rollout milestones and intends to deepen its North American presence through both direct sales and OEM partnerships.

With this transaction, Pinewood.AI effectively positions itself as a top contender in the North American DMS market, with a scalable model, large anchor customer, and capital-light path to expansion.