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PE-backed AA, Saga could be sold following E&Y valuation

24 Sep 2012

Breakdown cover and insurance provider the AA could be heading for a sale or flotation after its private equity owners hired Ernst & Young to value it, it is understood.

Acromas Holdings, which is owned by Charterhouse, CVC and Permira, is also assessing the value of fellow portfolio company Saga, which specialises in insurance for the over-50s, according to Reuters.

It said an Acromas spokesman denied there were plans to float or sell the 107-year-old AA, although added the firm was keeping its options open.

Acromas picked up complementary businesses IDS and Nationwide 4×4 in the last financial year, acquired a new building in Preston to support AA AutoWindshields and AA Home Emergency, and bought 716 new vehicles for the company’s patrol fleet.

The holding company was set up 2007 by the private equity trio to house the AA and Saga, which were merged through a $6.1bn deal.

The firms have come under fire for burdening Acromas with more than £700m in debt through the refinancing that took place when they bought the pair.

Permira and CVC, which already owned the AA before the merger and refinancing, has previously been the subject of scorn from union officials after culling 2,800 jobs and removing 600 breakdown patrols from the automobile service.

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