Acromas in partial exit from AA pre-IPO

Ellie Pullen
09 June 2014

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AA has announced plans for a buy-in management buyout (BIMBO) to acquire the bulk of the company from shareholder Acromas, in conjunction with its intention to float with a ТЃ1.4bn market cap.

Acromas – the holding company owned by Charterhouse, CVC and Permira and also the owner of recently listed Saga – currently wholly owns AA's share capital.

The planned BIMBO will see Bob Mackenzie, Martin Clarke and Nick Hewitt join AA's existing management team to buy the majority of the company's stock from AA. The management will be backed by a large list of cornerstone investors, namely Aviva, Blackrock, CRMC, GLG Partners, Henderson Global, Henderson Volantis, Invesco, L&G and Lansdowne Partners.

More than £930m has been received in binding commitments from cornerstone investors so far, around £730m of which has been offered to Acromas for the sale of its shares.

The company intends to seek admission to the main market of the London Stock Exchange. Up to 554 million shares will be offered at 250 pence apiece, 84.7 million of which will be new shares.

Following completion of the BIMBO, Acromas will hold a stake of around 31% in AA but will offer the remainder of its shares to new investors in the upcoming IPO.

AA will use approximately £185m of the £211.8m net proceeds expected the IPO to reduce debt.

CVC and Permira merged car breakdown recovery service AA with over-50s financial and travel service provider Saga in June 2007. Saga was acquired by Charterhouse in 2004 in a deal worth £1.35bn. CVC and Permira also purchased AA in 2004, in a deal worth £1.75bn.

Saga recently raised £550m in its IPO on the LSE and achieved a market cap of £2.1bn. A couple of months prior, Acromas had downplayed plans to float AA and emphasis was heavily on a potential listing of Saga.

Roadside assistance provider AA was founded in 1905 and is headquartered in Cheadle.

The business claims to command a 40% share of the roadside assistance market in the UK and to have a customer base totalling 16 million. It generated revenues of £973.9m for the year ending January 2014, as well as an EBITDA of £422.8m.