Lithia & Driveway is handing Pinewood Technologies Group the keys to their North American joint venture.

The companies announced the U.K.-based software provider has acquired Lithia’s controlling 51% stake in the operation in a $76.5 million transaction with LAD subsidiary Lithia UK Holdings Limited.

The deal also includes a five-year commitment to using the Pinewood Automotive Intelligence dealership management platform in all of Lithia’s current and future dealerships in the U.S. and Canada, as well as a pricing agreement for Pinewood.AI’s software.

Pinewood Technologies Group CEO Bill Berman said the platform will be piloted in the second half of 2025, with the full-system rollout scheduled to begin in 2026 and projected to be completed by the end of 2028.

“This agreement represents the next step in our strategic partnership with Pinewood.AI and supports our vision to modernize customer experiences across our ecosystem.” Lithia & Driveway president and CEO Bryan DeBoer said. “As Pinewood.AI’s largest global customer, we are excited to partner in the rollout of its 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 U.S. Each of our global stores are committed to the Pinewood Automotive Intelligence platform, and we will continue partnering on best-in-class product development.”

Pinewood.AI said in a news release it expects to generate some $40 million in annual recurring revenue once the rollout is complete. With additional North America-specific features planned for release by the end of 2028, projected annual revenue from Lithia is expected to reach approximately $60 million.

Berman called Lithia’s commitment to Pinewood.AI’s platform “a significant milestone on our journey to entering the North American market,” adding, “we look forward to working with them as a key customer long into the future.”

The joint venture was created in February 2024 with Lithia’s acquisition of British dealership group Pendragon, Pinewood’s parent company. Pinewood.AI became an independent entity and joined Lithia in a strategic partnership to co-develop automotive technology for the North American market.

Full ownership of the joint venture gives Pinewood.AI complete control of its North American platform, which it said removes potential barriers to its broader adoption and supports its expansion in the $6.5 billion North American auto retail software sector, as well as simplifying the company’s structure and financial reporting, enabling full revenue consolidation and greater transparency.

“The U.S. and Canada are central to our growth strategy, and through the joint venture we have made significant progress toward commercializing the Pinewood Automotive Intelligence platform for the North American market.” Berman said. “Assuming full control of the joint venture will strengthen our ability to fully capitalize on the opportunities available in a key strategic growth market.”

The acquisition, which will be satisfied through the issue of 14,560,691 new ordinary shares in Pinewood.AI, values the joint venture at $150 million. The valuation is based on the deployment of Pinewood.AI’s DMS platform and layered applications across Lithia’s North American footprint, and has been independently supported by Kroll LLC.