Travel: City investors to take control of AA under flotation plan
16:13 06 June 2014
The AA is poised for a £1.4billion stock market flotation that will see control of the UK’s biggest roadside recovery firm pass to a group of City investors.
The business, founded in 1905, is currently owned by Acromas Holdings, the private equity-backed firm behind the recent sale of shares in over-50s holidays and insurance company Saga.
Unlike the flotation of Saga, which involved retail investors, Acromas has secured the backing of City institutions including Aviva, Blackrock and Invesco to buy shares worth at least £930million as part of a management buy-in fronted by former Green Flag boss Bob Mackenzie as executive chairman.
Trading in AA shares is expected to commence later this month and to value the company at £1.38billion.
As part of the offer, the company will issue £210m of new shares, with the proceeds going towards a drive to cut the AA’s borrowings which currently stand at around £3bn. Acromas will retain a shareholding of around 31%.
Mr 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.”