AA Flotation

The AA announces intention to float on London Stock Exchange

The AA today announces its intention to proceed with a sale and flotation, to a management buy-in team led by Mr. Bob Mackenzie working alongside the existing AA management team, and backed by leading institutional investors, including Aviva, Blackrock, CRMC, GLG Partners, Henderson Global, Henderson Volantis, Invesco, L&G and Lansdowne Partners (the "Cornerstone Investors").

The Company and Acromas Bid Co Limited ("Acromas" or the "Selling Shareholder"), which currently owns 100% of the issued share capital of the AA, have received binding commitments of over £930 million from the Cornerstone Investors to acquire shares. As part of the offer the Company is expected to issue approximately £210m of new shares (the “New Shares”), with the remainder of the offer comprising the sale of existing shares (the "Existing Shares") by the Selling Shareholder (the "Offer").

Following the Cornerstone Investors' commitments, Acromas would retain an approximate 31% shareholding in the AA. However, given the interest shown to date, Acromas has agreed to make its remaining stake available to new investors at the same valuation. The Offer, which will commence shortly, will only be made outside of the United States to certain institutional and professional investors.
Admission is expected to take place in the second half of June 2014 and the total expected market capitalisation of the Company at Admission will be approximately £1,385 million.

The sale follows an approach made to the Selling Shareholder by a management buy-in team led by Mr. Bob Mackenzie. Mr. Mackenzie has extensive experience in leadership roles at automotive services businesses including as Chairman of Northgate PLC, the vehicle fleet management business, and former roles as Chairman and CEO of National Car Parks and its subsidiary Green Flag, a roadside services business. It is proposed that Mr. Mackenzie will be Executive Chairman, working alongside the existing AA CEO, Chris Jansen, and existing CFO, Andy Boland.

Together with the existing management team, the buy-in team of Mr. Bob Mackenzie, Dr. Martin Clarke and Mr. Nick Hewitt, bring a wealth of experience that includes proven operational, financial and strategic skills assembled over thirty years in executive management, private equity and strategic consulting. The buy-in team first identified the AA as a potential investment proposition over two years ago. In the intervening period significant work has gone into formulating a strategy for the Company which the team believe has potential to deliver an improved customer proposition and significant shareholder value.
The Company will apply for Admission of its Shares to the standard listing segment of the Official List of the FCA and to trading on the Main Market for listed securities of the London Stock Exchange.

Bob Mackenzie, Executive Chairman said,
“The AA is a very successful organisation with a strong record of serving its members and the needs of the UK motorist. We believe there are significant opportunities to grow the business, a sentiment shared by the high quality leading cornerstone investing institutions who have already committed over £930 million to the transaction.
We believe that as a public company, backed by investors of this quality, the AA will have a core set of long term committed investors to support its continued growth and development.
The AA is a fundamentally strong business and underpinning our approach is a clear strategy to invest in systems and new technologies to further enhance the service provided to our members and customers; to steadily reduce the AA’s existing debt; and to develop the growth opportunities that we have identified. With such valuable support from our Cornerstone Investors, my colleagues and I are looking forward to continuing the AA’s growth as an independent public company."