Carlyle acquires AA Ireland
AA plc has agreed to sell its Irish business and operations – AA Ireland – to Carlyle Cardinal Ireland Fund, LP (CCI) and Carlyle Global Financial Services Partners II, LP (CGFSP). The cash deal is valued at €156.6m.
The transaction is subject to approval by the Competition and Consumer Protection Commission in Ireland and by the Central Bank of Ireland but is expected to complete in late July 2016. Pursuant to the terms of the transaction, AA Ireland will have ongoing use of the AA brand. The AA has also agreed to provide certain transitional services to AA Ireland and will retain responsibility for the defined benefit pension plan of AA Ireland.
As at 31 January 2016, AA Ireland had generated profits before tax of €12m and had gross assets of €163m. The executive team of AA Ireland, led by its CEO Brendan Nevin, will invest in AA Ireland alongside Carlyle.
As an insurance broker-led business, AA Ireland differs significantly from the AA’s UK business, and synergies and potential cross sell opportunities are limited. 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 for the benefit of both groups.
Bob Mackenzie, Executive Chairman of AA plc, said, ‘After a competitive process, we are very pleased to have reached agreement to sell AA Ireland. We believe that this is a good result for our shareholders and for AA Ireland and its employees.’
The AA intends to use the net cash proceeds for partial repayment of its debt.
