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LONDON and MEDFORD, Ore. - Pinewood Technologies Group plc, known as Pinewood.AI, a provider of cloud-based software for the automotive retail industry, has agreed to purchase a 51% interest in its North American joint venture from Lithia UK Holdings Limited, a subsidiary of Lithia & Driveway (NYSE: LAD). The deal, valued at $150 million, will be settled through the issuance of new shares worth $76.5 million.
This acquisition grants Pinewood.AI full ownership of the joint venture, positioning the company to leverage the $6.5 billion North American automotive retail software market without the constraints of shared control. It is also expected to streamline the company’s structure and improve financial transparency through full revenue consolidation.
Concurrently, Pinewood.AI and Lithia have entered into a five-year contract, ensuring the deployment of Pinewood’s Automotive Intelligence™ platform across Lithia’s dealerships in the United States and Canada by the end of 2028. This agreement includes a pricing arrangement for Lithia’s use of the software.
Projected revenues from Lithia are anticipated to reach $40 million annually upon completion of the current platform rollout, with expectations to increase to $60 million annually after the introduction of North America-specific features by 2028. According to InvestingPro data, Lithia has demonstrated strong financial performance with a 12.8% revenue growth in the last twelve months and maintains a healthy current ratio of 1.18.
Bill Berman, CEO of Pinewood Technologies Group plc, expressed enthusiasm for the acquisition and the new contract, emphasizing the strategic importance of the North American market and the anticipated pilot of the platform in Lithia’s U.S. stores in the latter half of 2025.
Bryan DeBoer, President and CEO of Lithia & Driveway, also remarked on the significance of the agreement, highlighting the partnership’s role in modernizing customer experiences and Lithia’s commitment to the Pinewood Automotive Intelligence™ Platform.
Following the transaction, Lithia will maintain a minority interest in the joint venture and continue as a key customer. InvestingPro analysis reveals that Lithia has maintained dividend payments for 16 consecutive years and has raised its dividend for 11 straight years, demonstrating strong financial stability. For deeper insights into Lithia’s financial health and future prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro, which covers over 1,400 US equities with detailed analysis and actionable intelligence.
The valuation of the joint venture has been independently corroborated by Kroll LLC, considering the expected impact of the software deployment across Lithia’s North American operations.
This news is based on a press release statement.
In other recent news, Lithia Motors Inc. reported its first-quarter 2025 earnings, revealing an adjusted earnings per share (EPS) of $7.66, slightly surpassing the forecast of $7.61. The company’s total revenues reached $9.2 billion, exceeding the anticipated $9.18 billion, marking a 7% year-over-year increase. Despite these positive results, the stock experienced a decline, reflecting broader market concerns. In terms of analyst evaluations, Goldman Sachs initiated coverage of Lithia Motors with a Neutral rating, citing uncertainties in near-term demand, while Citi raised its price target to $378 and maintained a Buy rating, highlighting the company’s financial resilience. Jefferies, on the other hand, reduced its price target to $400 but continued to support a Buy rating, pointing to strong new vehicle gross profit performance. Additionally, Lithia Motors’ shareholders approved key proposals at the annual meeting, including executive compensation and board nominees, demonstrating strong shareholder support. These developments provide a glimpse into Lithia Motors’ current market position and strategic outlook.
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