Carlyle snaps up RAC

Roadside recovery company RAC has been sold to private equity firm The Carlyle Group in a deal worth £1 billion.

The deal for the Birmingham-headquartered company achieves an exit for insurance business Aviva, six years after the company paid £1.1 billion to buy the breakdown recovery brand.

According to a statement financing for the deal is to come from the Carlyle Europe Partners III fund, a €5.4 billion buyout fund aimed at investments in Europe. The buy is the seventh investment by the fund in the past year; with other deals including communications technology business Sagecom and dental company Integrated Dental Holdings.

Chief executive officer of RAC, Angela Seymour-Jackson, says the investment will enable RAC to build on its services as well as move into new business areas.

Seymour-Jackson adds: ‘Carlyle has recognised that RAC is a high-quality business with significant growth potential.’

Founded in 1897 RAC has seven million members and 4,000 employees. The business also provides motor insurance, broking services and legal and motor claims services.

Andrew Burgess, managing director of The Carlyle Group, comments: ‘We see great opportunity to enhance the roadside business with an emphasis on ensuring customer satisfaction at both the consumer and corporate levels.’

Burgess adds that there is also potential to grow the business by investing in new financial services products such as household insurance.

The last exit achieved by Carlyle Europe Partners was the sale of its 63 per cent stake in luxury fashion company Moncler. The US-based firm now has $107.6 billion of assets under management.

Carlyle was advised by Lazard and Clifford Chance. JP Morgan Cazenove acted as financial advisors and Slaughter and May as legal advisors to Aviva.

Todd Cardy

Todd Cardy

Todd was Editor of between 2010 and 2011 as well as being responsible for publishing our digital and printed magazines focusing on private equity and venture capital.

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