Acromas, the parent company of motor services company the AA, has received binding commitments of over £930 million from cornerstone investors ahead of its planned initial public offering (IPO) later this month.
Aviva, Blackrock, CRMC, GLG Partners, Henderson Global, Henderson Volantis, Invesco, L&G and Lansdowne Partners are among the investors committed to the deal, which combines a sale and flotation following an approach by a management buy-in team led by executive chairman Bob Mackenzie.
Following the deal, Mackenzie will become the executive chairman and work alongside the existing AA chief executive officer, Chris Jansen, and existing chief financial officer, Andy Boland.
The deal could value the company at around £1.3 billion. Following the Cornerstone Investors' commitments, Acromas would retain an approximate 31 percent shareholding in the AA. However, Acromas has agreed to make its remaining stake available to new investors at the same valuation.
Acromas is owned by private equity groups CVC, Charterhouse and Permira, which put the AA and Saga together in a £6.2 billion merger in 2007.
Mackenzie said: “The AA is a very successful organisation with a strong record of serving its members and the needs of the UK motorist. We believe there are significant opportunities to grow the business, a sentiment shared by the high quality leading cornerstone investing institutions who have already committed over £930 million to the transaction.
“We believe that as a public company, backed by investors of this quality, the AA will have a core set of long term committed investors to support its continued growth and development.
“The AA is a fundamentally strong business and underpinning our approach is a clear strategy to invest in systems and new technologies to further enhance the service provided to our members and customers; to steadily reduce the AA’s existing debt; and to develop the growth opportunities that we have identified.
“With such valuable support from our Cornerstone Investors, my colleagues and I are looking forward to continuing the AA’s growth as an independent public company.”
Jansen said: “This is a very exciting and timely development for the AA and marks the start of a new chapter for the company. The AA is an iconic organisation and has at its heart a very skilled and loyal team of over 8,000 employees, dedicated to serving our members. We have earned their trust over many decades and with it the opportunity to offer new products and services of the highest quality.
“Under its ownership, Acromas has continued to invest in the AA to ensure that we have maintained and extended our lead in service levels and organisational scope. On almost every metric, the service we deliver to our members is well ahead of that of our competition, and we will strive to maintain that position.”
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Acromas, AA, IPO, Aviva, BlackRock, Legal & General, Europe, Bob Mackenzie