AA and RAC private capital owners race to exit ramps
Owners of UK’s two biggest roadside recovery businesses expected to exit next year
The AA, the UK’s biggest roadside recovery business, has been sounding out potential buyers ahead of a potential £5bn sale as its rival RAC steers towards a potential London listing as soon as next year.
The AA, owned by a consortium including TowerBrook Capital Partners, Warburg Pincus and Stonepeak, is working with advisers at Rothschild and JPMorgan on options for the business.
The business is valued at £5bn and has had expressions of interest around that level from private equity firms and strategic buyers, said three people close to the situation. A potential London listing is an option, the people added.
TowerBrook, Warburg Pincus and Stonepeak all declined to comment.
Meanwhile, the RAC is working on a potential stock market listing and is also targeting a £5bn valuation, said two people familiar with the situation. It is owned by CVC Capital Partners, GIC, Singapore’s investment fund, and Silver Lake Partners. A sale is also a possibility, even if an initial public offering is the more likely exit route, the people added.
CVC, GIC and Silver Lake all declined to comment.
City advisers have commented on how unusual it is to have two very comparable businesses, with similar valuations in the market at the same time. One banker said it would test the boundaries of investor appetite if they were both to opt for listing shares on the London Stock Exchange.
The AA was taken private in 2020 for just £219mn after six rocky years as a listed company, when it struggled with the debts heaped on it by previous private equity owners, CVC and Permira. It was listed with a £1.4bn valuation and £2.6bn debt pile.
As well as poor performance and profit warnings, it was also embroiled in a boardroom drama in 2017 when its former executive chair, Bob Mackenzie, was fired for punching a colleague.
The AA now claims to have transformed itself by reducing its debt to 4.1 times earnings, compared to 6.7 times when it was a public company.
It posted a 5 per cent increase in revenue to £623mn in the first half of 2025, and an 8 per cent increase in adjusted earnings before interest, tax, depreciation and amortisation to £243mn.
It has 17mn customers, making it the largest in the sector and has recently signed a deal with OpenAI alongside its insurance, driving schools and mobile repair vans.
The RAC has 15mn members. Its revenues rose 8 per cent in the first half to £411mn and it posted a 12 per cent increase in earnings to £152mn.
Both companies are expected to highlight to prospective new owners and investors the growth opportunities from the rising adoption of electric vehicles, which require extra technical maintenance when they break down.
EVs typically break down because of faults with their 12-volt batteries and because of tyre damage. This is caused because they are typically heavier than cars with combustion engines.