The deal, which is worth 76.5 million dollars (£56.4m) in shares, will be completed through the issue of 14.56m new shares in Pinewood.AI, priced at 386.5 pence per share, a London Stock Exchange update said.
Pinewood.A said that it will enter a five-year contract with Lithia to roll out its software to all Lithia’s current and future sites across the US and Canada by the end of 2028 at the latest.
The company said it expects to generate around 40 million dollars (£29.5m) in annual recurring revenue from Lithia in North America once its platform has been fully deployed.
Both firms said that ‘further upside could be unlocked’ from Pinewood.AI taking full control of the Joint Venture.
Bill Berman, CEO of Pinewood Technologies Group plc, said: ‘We are delighted to have reached an agreement with Lithia to acquire the majority stake of the North America joint venture.
‘The US and Canada are central to our growth strategy, and through the Joint Venture, we have made significant progress towards commercialising the Pinewood.AI platform for the North American market.
‘Assuming full control of the Joint Venture will strengthen our ability to fully capitalise on the opportunities available in a key strategic growth market.’
He added: ‘I would like to take this opportunity to thank Lithia for their partnership in the joint venture and we look forward to working with them as a key customer long into the future.’
Lithia Motors Inc. CEO Bryan DeBoer said: ‘This agreement represents the next step in our strategic partnership with Pinewood.AI and supports our vision to modernise customer experiences across our ecosystem.
‘As Pinewood.AI’s largest global customer, we are excited to partner in the rollout of their platform across our North American network and accelerate our transformation into a fully integrated, data-driven retailer.
‘Pinewood.AI is now able to emerge as the leading automotive intelligence provider in the US. Each of our global stores are committed to the Pinewood Automotive Intelligence Platform, and we will continue partnering on best-in-class product development.’
Shares in Pinewood Technologies shot up by 11% soon after the announcement.