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(Sharecast News) - Pinewood Technologies Group announced on Friday that it has agreed to acquire the 51% stake it does not already own in its North American joint venture from Lithia Motors for $76.5m, to be satisfied entirely in new shares.
The London-listed firm said the deal valued the joint venture at $150m, and strengthened Pinewood's position in the US and Canadian automotive software markets.
It said he consideration would be paid via the issue of 14.6 million new ordinary shares in Pinewood.AI at 386.5p each, representing the 30-day volume-weighted average share price.
The company said the acquisition, backed by an independent valuation from Kroll, would give it full strategic control over its North American operations and allow faster commercial execution.
On completion, Pinewood.AI would also enter into a five-year software deployment contract with Lithia, covering all of the US group's current and future sites in North America through to the end of 2028.
Once fully rolled out, Pinewood said it expected to generate around $40m in annual recurring revenue, rising to $60m with the addition of market-specific applications.
Pinewood said the transaction removed the perceived conflict of interest created by Lithia's former majority stake and unlocked broader growth opportunities in the $6.5bn North American automotive software market.
Lithia said it would remain a long-term minority shareholder and a key customer under the terms of the new agreement.
"We are delighted to have reached an agreement with Lithia to acquire the majority stake of the North America joint venture," said Pinewood chief executive officer Bill Berman.
"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."
Berman said the company was also announcing that it had agreed the terms of a five-year contract with Lithia to implement the Pinewood Automotive Intelligence platform across all its current and future sites by the end of 2028.
"This is a significant milestone on our journey to entering the North American market and we remain on track to pilot the platform in Lithia's US stores in the second half of 2025, with the full system roll-out commencing in 2026."
At 0920 BST, shares in Pinewood Technologies Group were up 16.4% at 465.04p.
Reporting by Josh White for Sharecast.com.