AA plc has agreed to sell to sell its Irish business and operations to Carlyle Cardinal Ireland Fund and Carlyle Global Financial Services for €157m. AA Ireland provides insurance intermediary services and motoring services to private individuals and corporate entities in Ireland.
The transaction is subject to approval by the Competition and Consumer Protection Commission and by the Central Bank of Ireland.
The AA, a UK plc, will retain responsibility for the defined benefit pension plan of AA Ireland.
In the year to end January 2016, AA Ireland made a pre-tax profit of €12m and had gross assets of €163m. EBITDA was flat in 2015/16 at €17m. The executive team of AA Ireland, led by its CEO Brendan Nevin, will invest in AA Ireland alongside Carlyle.
AA Ireland and the AA will enter into a long term Ongoing Services Agreement which will preserve the current trading arrangements between the AA and AA Ireland.
In Association with
The AA intends to use the net cash proceeds for partial repayment of its debt mountain, which stood at £2.9 billion last January.
The AA has been operating in Ireland for over 100 years and employs 430 people. AA Ireland has 128,000 members and 185,000 insurance clients. Membership growth was 7.6% in 2015 and insurance policies increased by 3.9%.
The Carlyle Group previously made a successful investment in the RAC in the UK.
John Dolan, Managing Director, Cardinal Capital Group, said: “This is CCI’s seventh investment in growing Irish companies since 2014 and we continue to explore further potential investments. With our investment building on the existing strengths of the business, there is a strong platform to achieve the long-term growth opportunities that have been identified for AA Ireland.”
Peter Garvey, Managing Director, The Carlyle Group, said: “Through the introduction of key value creation initiatives at RAC we successfully grew revenues by 83% across a four year period. We will look to bring that relevant experience to bear at The AA Ireland.”
Carlyle Cardinal Ireland is a private equity joint venture between The Carlyle Group and Cardinal Capital Group. The €292 million private equity fund is focused on growth capital and buyout investment opportunities across the island of Ireland.
The fund has previously completed six investments including Abtran, Carroll Cuisine, Lily O’Brien’s, General Secure Logistics Services (GSLS), Learning Pool and Payzone.
Photo: Peter Garvey (left), Brendan Nevin and John Dolan (right)
