Stonepeak has agreed to invest £450 million ($575 million) in AA, a leading provider of roadside assistance services in the U.K.
The deal was struck via an agreement with majority shareholders TowerBrook Capital Partners and Warburg Pincus and values the company at approximately £4 billion. TowerBrook and Warburg Pincus will remain the majority shareholders in AA.
Expected to close in the first half of 2024, the transaction follows the take-private of AA in March 2021 by TowerBrook, Warburg Pincus and a new management team. The first phase of its strategy is winding down and aimed to return the business to growth and accelerate its profitability. The additional capital from Stonepeak is set to support the next phase of the company’s growth strategy by strengthening its balance sheet and support of investment in further growth and innovation, officials 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 U.K.’s transportation system,” said Nikolaus Woloszczuk, senior managing director at Stonepeak, which has $57.9 billion invested across infrastructure and real assets.
AA’s network of patrols and garages serves 14 million members. The company attends to around 9,400 breakdowns daily. The company also has an insurance business. AA CEO Jakob Pfaudler said that the company currently has strong momentum and recently reported positive revenue, profit and customer growth.
“This investment allows us to further deleverage whilst continuing to invest in our customers and people as we build a more digitized service offer to create long-term value for all our stakeholders,” Pfaudler 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, and we look forward to working with the AA, Warburg Pincus and TowerBrook, as the company continues its development,” added Woloszczuk.