Sparks

Pinewood has announced that it intends to acquire the remaining 90.9% stake in Seez for a total cost of $42m/£33.3m (Pinewood acquired an initial stake in Seez in September 2024 for $4.2m/£3.43m). Seez is a Dubai-based company providing a range of software applications to the automotive industry, in particular AI chatbots. The acquisition consideration will be made up of: 1) £22.8m in cash to the sellers; 2) £3.9m in cash to holders of employee stock ownership plan options; and 3) the issue of Pinewood shares worth £6.6m (at last night’s close, c 1.96m shares or 2% of outstanding).

To fund the cash element of the deal, Pinewood has undertaken a fund-raise, which was oversubscribed. This comprised a placing, a direct subscription and a retail offer, which raised gross proceeds of £35.7m from the issue of 11,325,031 shares at 315p (a 6.3% discount to last night’s close),  representing 13% of existing share capital. The shares from the fund-raise are expected to be admitted to trading on 25 February. Any cash remaining after paying for Seez will be used to fund the development pipeline and management expects the deal to be earnings accretive by FY26.

While Pinewood’s largest shareholder and partner, Lithia, does not intend to participate, it has confirmed it intends to deploy the Seez chatbot across all Lithia stores globally. The deal dilutes down Lithia’s stake, gives Pinewood full control over Seez’s AI technology (which should help with its offering for the US market launch), and the additional cash should accelerate Pinewood’s drive for growth in several other regions.