RAC sold for £1bn
Birmingham-headquartered RAC has been sold in a £1bn deal. The breakdown recovery company was sold by insurer Aviva to private equity group Carlyle.
The transaction values RAC at 17 times its net earnings in 2010. Completion, which is subject to regulatory and competition approvals, is expected at the end of the third quarter of 2011.
In a statement this morning, Carlyle said it was "fully supportive" of RAC's UK management team led by managing director Angela Seymour-Jackson, and its strategy to profitably grow the business.
RAC, which employs 4,000 staff across the UK, was bought by Aviva for about £1.1bn six years ago.
Since 2005, Aviva has sold divisions including the BSM motoring school and Auto Windscreens.
Andrew Moss, group chief executive of Aviva, said: "The sale of RAC is another important step for Aviva and realises significant value for our shareholders.
"Together with the recent partial disposal of Delta Lloyd, it demonstrates clear delivery of our strategy and provides the flexibility to deepen our presence in the priority markets where we have strength and scale."
