24 May 2025, 23:59
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Alamy
The UK’s largest breakdown recovery service has approached JP Morgan and Rothschild to advise on the company’s forthcoming business strategy – which could see it valued at over £4.5 billion.
AA, currently owned by three investors, is tipped to appoint JP Morgan and Rothschild for a review of their forthcoming business strategy.
The strategy could take several forms – either an outright sale, listing on public markets, or the disposal of a minority stake.
The move follows a financial recovery in the company, as it gradually pays off a debt burden from its insurance division.
AA has recorded four consecutive years of growth in their customers, revenue and earnings.
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The company’s most recent set of financial results revealed they had a debt burden of £1.9 billion – but its stable growth in profitability has boosted shareholder confidence in their ability to pay off that sum.
There has been no official comment from AA on the matter, and some insiders have said that there are no imminent plans for a corporate sale.
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Alamy
However, the potential appointment of major banks to advise on valuation could further boost shareholders’ confidence in the business’ renewed room for growth.
Currently owned by private equity firms Towerbrook Capital Partners, Warburg Pincus and Stonepeak, the firm has gone through a succession of owners over the last 25 years.
When joint owner Stonepeak invested £450 million in the firm last summer, the company was valued at approximately £4 billion.
Taking into account the company’s growth since that investment, insiders now say it would be unlikely that any transaction below £4.5 billion would take place.
AA currently has 16 million UK customers, 3.3 million of which are individual members.
As well as its breakdown division, the company also offers insurance services, and currently operates the UK’s largest driving school.
Last year, the company attended 3.5 million vehicle breakdowns.
