30th Jun 2016 06:45
LONDON (Alliance News) - Breakdown cover provider AA PLC on Thursday said it has struck a deal to sell its Irish business, which focuses on providing insurance and motoring services, for a total of EUR156.6 million.
AA is expecting to close the deal in late July as it offloads AA Ireland Ltd to Carlyle Cardinal Ireland Fund LP and Carlyle Global Financial Services Partners II LP, subject to approval from the Competition & Consumer Protection Commission in Ireland and the Central Bank of Ireland
AA Ireland will retain the AA brand once the deal is completed, and the FTSE 250-listed firm will provide certain transitional services to the Irish business. AA will remain responsible for the defined benefit pension plan of AA Ireland.
AA Ireland, which has around 450 employees, generated pretax profit of EUR12.0 million in the financial year to the end of January and had gross assets of EUR163.0 million at that point.
"As an insurance broker-led business, AA Ireland differs significantly from the AA's UK business, and synergies and potential cross sell opportunities are limited," said the company.
AA said it intends to use the net cash proceeds for partial repayment of its debt.
"The AA will continue to focus on its transformation into the UK's pre-eminent membership services organisation, and on delivering shareholder value supported by its strong financial position, including its high level of cash generation," the company added.
By Joshua Warner; [email protected]; @JoshAlliance
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