The Carlyle Group to buy RAC for £1bn
Completion, which is subject to regulatory and competition approvals, is expected at the end of the third quarter of 2011, with the new owners looking to expand into related financial services.
Aviva said that the sell-off forms part of its strategy to 'focus on insurance and savings businesses in its priority markets and represents further significant progress in the transformation of Aviva’s portfolio'. It added that it will continue its commercial relationship with RAC both as a key underwriter of motor insurance on RAC’s panel and as a partner, selling RAC breakdown cover to Aviva customers.
Commenting on the transaction, Angela Seymour-Jackson, CEO of RAC, said: ‘We are very excited to be partnering with Carlyle, since their financial strength and experience in the motor services industry will be very valuable to us. This investment will enable us to enhance our current customer offering as well as diversify into new business areas. Carlyle has recognised that RAC is a high-quality business with significant growth potential. We have enjoyed an excellent partnership with Aviva, and are looking forward to our next phase of growth under new ownership.’
Andrew Burgess, managing director of The Carlyle Group, said: ‘We see great opportunity to enhance the roadside business with an emphasis on ensuring customer satisfaction at both the consumer and corporate levels. There is also strong longer-term potential to grow the business by investing in new and innovative financial services offerings such as motor and household insurance. We look forward to leveraging our industry network and deep sector expertise to enable RAC to reach its full potential.’
Equity for this transaction will come from Carlyle Europe Partners III (CEP III), a €5.4bn (£4.8bn) buyout fund focused on investment opportunities in Europe. Carlyle already owns car rental firm Hertz.