Thursday 18 October 2018

AA Ireland sold to Carlyle Cardinal Ireland in multi-million euro cash deal

Pictured (l-r): Peter Garvey, Managing Director, The Carlyle Group, Brendan Nevin, CEO, the AA Ireland and John Dolan, Managing Director, Cardinal Capital Group. Photo Colm Mahady / Fennell Photography
Pictured (l-r): Peter Garvey, Managing Director, The Carlyle Group, Brendan Nevin, CEO, the AA Ireland and John Dolan, Managing Director, Cardinal Capital Group. Photo Colm Mahady / Fennell Photography
Michael Cogley

Michael Cogley

AA Ireland has been sold to private equity fund Carlyle Cardinal Ireland Fund and Carlyle Global Financial Services Partners for €156.6m, which includes consideration for cash left on the balance sheet.

The deal for the insurer, which employs 430 people here, is expected is to be completed by the end of July.

AA Ireland will continue to use its brand and intends to use the net cash proceeds for partial repayment of its debt.

The business in Ireland will continue to be run by the current executive team, who have also invested in the company, led by Brendan Nevin, CEO. 

The company provides car and home insurance, as well as servicing, motoring advice and breakdown cover.

Mr Nevin said the firm is "excited" that the Irish headquartered company would be run by its local management team.

"Our new owners have a proven track record of success across the sectors we operate in, which will benefit the AA Ireland as we look to continue growing the company.”

“Our focus is on delivering great products and services and our recent entry into the life assurance market is a signal of bigger and better things to come for our members and customers in Ireland.”

Read more: Carlyle raises €3.75bn for latest buyout fund

Cardinal Capital Group managing director John Dolan said the private equity fund is eyeing up more Irish investments.

"This is CCI’s seventh investment in growing Irish companies since 2014 and we continue to explore further potential investments. The AA Ireland is a fantastic brand with a high degree of recognition and trust among consumers.

"That trust, and the premium service provided by AA Ireland’s 430 employees is reflected in the high customer-retention rates. With our investment building on the existing strengths of the business, there is a strong platform to achieve the long-term growth opportunities that have been identified for AA Ireland.”

Carlyle Group managing director Peter Garvey said his firm has a "keen understanding" of the motoring and insurance services sectors.

"Through the introduction of key value creation initiatives at RAC we successfully grew revenues by 83% across a four year period. We will look to bring that relevant experience to bear at The AA Ireland. We are committed to working with Brendan and the executive team, supporting continued investment to deliver fantastic products and services to the Irish market.”

The deal comes after the firm announced it would be moving into the life insurance market.

Speaking at the announcement of its entry into the life insurance market AA commercial director John Farrell described it as a "natural extension" of the firm's product offering.

"With a large customer base slanted towards urban professionals, there is a strong reliance on AA products as they reach critical milestones such as buying a home or having kids," he said.

It is understood the move had been granted the full backing of the AA's new owners.

The deal follows another significant move from Cardinal, which is State-backed, after it acquired Cork-based Abtran in a deal worth around €40m.

Carlyle is an active investor in medium sized businesses here with stakes in Carrolls Cuisine, Lily O'Brien's, Payzone and cash in transit business GSLS.

Read more: Cardinal deal may spark AA expansion

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