Global private equity firm Carlyle Group (NASDAQ: CG) has partnered with Carlyle Cardinal Ireland (CCI) to acquire the AA Ireland from the AA plc (LSE: AA) for €156.6 million, including consideration for cash left on balance sheet.
The AA has been operating in Ireland for over 100 years and is a highly respected and trusted brand. The AA Ireland is one of the largest insurance intermediaries in Ireland and one of the best known motoring services provider employing more than 430 people. The company is a highly diversified business with more than 350,000 customers across its motor, home, travel and life businesses. The AA Rescue service attends well over 100,000 car break downs every year, 80% of which are fixed on-the-spot.
The business in Ireland will continue to be run by the current executive team, who have also invested in the company, led by Brendan Nevin, CEO.
Carlyle Cardinal Ireland (CCI) have been active growth investors in the Irish market over the last two years and are current investors in a range of well-known Irish branded companies including Lily O’Brien’s, Carroll Cuisine and Payzone.
The Carlyle Group previously made a highly successful investment in British automotive services company RAC and also has a deep understanding of the insurance sector through its investments, notably including PIB Insurance Brokers, Barbon, JenCap and Epic.
“We are excited that the AA Ireland will now be an Irish headquartered company run by its local management team,” said AA Ireland CEO Brendan Nevin. “Our new owners have a proven track record of success across the sectors we operate in, which will benefit the AA Ireland as we look to continue growing the company.”
“Our focus is on delivering great products and services and our recent entry into the life assurance market is a signal of bigger and better things to come for our members and customers in Ireland.”
“This is CCI’s seventh investment in growing Irish companies since 2014 and we continue to explore further potential investments,” said Cardinal Capital Group managing director John Dolan.
“Our firm has a keen understanding of the motoring services and insurance sectors,” said Carlyle Group managing director Peter Garvey. “Through the introduction of key value creation initiatives at RAC we successfully grew revenues by 83% across a four year period. We will look to bring that relevant experience to bear at The AA Ireland. We are committed to working with Brendan and the executive team, supporting continued investment to deliver fantastic products and services to the Irish market.”
The deal is subject to approval from the Competition and Consumer Protection Commission and the Central Bank of Ireland.
Carlyle Cardinal Ireland is a joint venture between the Carlyle Group and Cardinal Capital Group. The €292 million private equity fund is focused on growth capital and buyout investment opportunities across the island of Ireland.
The fund has previously completed six investments including Abtran, a business process-management company, Tullamore-based cooked meats producer Carroll Cuisine, Kildare-based premium chocolate manufacturer Lily O’Brien’s, General Secure Logistics Services (GSLS), an Irish cash management solutions provider, Learning Pool, the Northern Ireland based e-learning company and Payzone, the largest provider of multi-channel consumer payments across Ireland.
Cardinal Capital Group is Ireland’s leading provider of alternative capital, directing private-equity capital, mezzanine finance and alternative lending to a broad range of sectors in the Irish market. Cardinal invests its own capital alongside institutional funders to support entrepreneurs and corporate management teams as well as real estate investors and developers.
The Carlyle Group is a global alternative asset manager with $178 billion of assets under management across 125 funds and 164 fund of funds vehicles as of March 31, 2016. Carlyle’s purpose is to invest wisely and create value on behalf of its investors, many of whom are public pensions. Carlyle invests across four segments – Corporate Private Equity, Real Assets, Global Market Strategies and Investment Solutions – in Africa, Asia, Australia, Europe, the Middle East, North America and South America. Carlyle has expertise in various industries, including: aerospace, defense & government services, consumer & retail, energy, financial services, healthcare, industrial, real estate, technology & business services, telecommunications & media and transportation. The firm employs more than 1,650 people in 36 offices across six continents.