AA valued at £1.38bn in IPO

However, at the time of writing, the company's shares had dipped to 239 pence in early conditional trading, having recovered slightly from a low of 231 pence.

The offer was oversubscribed and comprised 554 million shares, of which 85 million were new shares. Conditional dealings have started on the London Stock Exchange under the "AA" ticker with full admission to the standard listing segment expected to take place on 26 June.

The flotation follows a buy-in management buyout (BIMBO) process and sees Acromas sell its remaining 31% stake in the company. The BIMBO saw Bob Mackenzie, Martin Clarke and Nick Hewitt join AA's existing management team alongside CEO Chris Jansen and CFO Andy Boland.

When AA announced its intention to float earlier this month, it had already received more than £930m of commitments from cornerstone investors. Around £730m had been offered to Acromas – the holding company owned by Charterhouse, CVC and Permira – for the sale of its shares.

Following the IPO, AA will use £185m of the proceeds to repay debt. In the year to January 2014, the company reported EBITDA of £422.9m up from £394.6m the year before. Its turnover also increased marginally, up from £971m to £973.6m.

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 for £1.35bn in 2004, the same year CVC and Permira purchased AA in a deal worth £1.75bn.

Saga 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 emphasised a potential listing of Saga.

Company
Cheadle-headquartered AA is a motoring association founded in 1905. The company has around 16 million customers and in the year ending January 2014, reported EBITDA of £422.9m with a turnover of £973.6m.

People
Chris Jansen is CEO of AA and Andy Boland is the company's CFO. Andrew Goodsell is chairman of Acromas.

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• Topics
• UK / Ireland
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• CVC Capital Partners
• Permira
• Charterhouse Capital Partners