The AA is offloading its Irish operations for nearly €157 million
The biggest roadside assistance provider in the country will be sold to two private equity funds.
ROADSIDE ASSISTANCE AND insurance group the AA will sell its Irish business to two private equity funds for close to €157 million.
The UK-based Automobile Association (AA) confirmed in May that it was in talks with the investment outfit to sell its operations in the Republic.
Today it said it had agreed a deal with Carlyle Cardinal Ireland and Carlyle Global Financial Services Partners to sell its local business in an all-cash deal worth €156.6 million.
Executives at AA Ireland, which is led by former Bank of Ireland director Brendan Nevin, will invest in the company alongside Carlyle.
The deal is expected to be completed in late July pending approval by the competition watchdog and the Central Bank.
The AA’s profitable Irish arm, which employs about 480 people, has hundreds of thousands of customers in the country across its breakdown cover and insurance businesses.
Last year it delivered an operating profit of £13 million, although that was down slightly on its return the previous year.
AA Ireland has been operating for more than a century and is the largest roadside assistance provider in Ireland with around two-thirds of the total market for the service, while it also recently announced plans to move into the life insurance market.
The buyout comes at a time when car insurance premiums have soared over one-third, although many providers are still struggling to eke out a profit.
Carlyle Cardinal Ireland has already been involved in a number of deals in the Republic, including investments in Lily O’Brien’s and Payzone.
The buyer is backed by both its US parent and the Dublin-based Cardinal Capital Group and it has received €125 million in funding from the state’s Irish Strategic Investment Fund.