A New York-headquartered firm will invest £450 million in the AA to become a shareholder in the roadside assistance group, and support its next phase of growth.
Stonepeak, which specialises in infrastructure investments and as at June had $57.9bn (£45.5 billion) of assets under management, has entered into an agreement with the AA, and TowerBrook Capital Partners and Warburg Pincus which remain the majority shareholders of the company.
The additional capital is aimed at allowing the AA, which had debts of £2.2 billion as at the end of 2022, to strengthen its balance sheet and supporting backing further growth and innovation.
Jakob Pfaudler, chief executive of the AA said: “We have strong momentum, having recently reported positive revenue, profit, and customer growth, and we are excited about the future prospects of the business."
Pfaudler added: "This investment allows us to further deleverage whilst continuing to invest in our customers and people as we build a more digitised service offer to create long-term value for all our stakeholders.”
The AA, which serves 14 million members and also has a insurance business, was taken private in March 2021 under the leadership of TowerBrook, Warburg Pincus, and its new management team.
we believe that the AA has the right fundamentals in place to accelerate growth
The latest transaction is expected to close in the first half of 2024.
Nikolaus Woloszczuk, senior managing director at Stonepeak said: “We view the AA as a critical provider of transport services, underpinned by its unique network of nationwide patrols, and we are delighted to be investing to support this essential piece of the UK’s transportation system."
Woloszczuk also said: "With its market leading position, scale, iconic brand, and the resilient nature of its underlying market, we believe that the AA has the right fundamentals in place to accelerate growth."
