Global asset manager, The Carlyle Group, has announced it has entered into an agreement with GIC, Singapore’s sovereign wealth fund, to become a co-shareholder in RAC.
Following the transaction, Carlyle and GIC will jointly own a majority stake in the business with RAC management holding the remaining shares.
The investment is expected to be completed by the end of the year and the transaction completes the strategic review undertaken by Carlyle and as a result, RAC will not be pursuing an IPO at this time.
RAC is the second-largest roadside assistance provider in the UK and has approximately eight million roadside members.
Since Carlyle acquired the RAC in 2011, it has invested more than £40 million into the business and the management team have also positioned the RAC for future growth through the upgrading of its IT systems and sustained investment in its brand and the development of a database to enable enhanced sales and marketing. These transformational investments have helped RAC increase net revenue from £433 million to £485 million.
Andrew Burgess, partner The Carlyle Group, said: “We are delighted to welcome GIC as a partner in RAC. GIC is a high calibre, long-term investor that shares Carlyle’s vision for RAC.
“Both Carlyle and GIC believe that RAC has a clear strategy with significant growth potential, which its talented and experienced management team will continue to deliver. GIC will provide a solid partnership for the business.”
Henry Ormond, senior vice president of GIC Special Investments, said: “RAC is a good example of GIC’s investment objectives as a long-term investor.
“RAC combines both consistently strong financial performance, driven by the outstanding quality of service it offers its members, and continued growth potential.
“We are delighted to have the opportunity to partner with the management team and The Carlyle Group, and to support RAC's future success.”
Chris Woodhouse, CEO at RAC, said: “GIC joining forces with Carlyle is very good news for RAC’s employees, members and customers as they back the continuing investment and long-term growth plan for the business.
“I am extremely proud of what everyone at RAC has done to contribute to our success over the past few years and am confident that the exceptional level of service that we provide, which is key to our success, will be elevated even further under the new ownership structure.”
GIC is a global investment firm with well over $100 billion in assets under management.
It has been a long-time investor in the United Kingdom’s public and private markets with stakes in Broadgate, Rothesay Life, the Kelda Group and Heathrow Airport Holdings.
Established in 1981, the firm manages Singapore’s foreign reserves and is headquartered in Singapore.