I hold no brief for Aviva, but had I been an RAC employee I would have been disappointed and a little worried by this news.
www.guardian.co.uk/business/2011/jun/23/rac-sold-to-us-private-equity-firm-carlyle
The rationale given for selling it is rather strange, given that Aviva's core activity is general insurance sales and that private equity buyer Carlyle sees the opportunity in the RAC to sell "motor and household insurance". The likely explanations are that Aviva has got a very good price (as you would need to if you were helping to set up a competitor) and/or that Carlyle sees a major opportunity for cost cutting, having bought RAC on a 17x earnings multiple.
Carlyle won't say how much debt it has used for the purchase, but it is rumoured to be mainly bond rather than bank funded.
If they follow the same path as the AA, the first thing they do will be to "rationalise" the patrols so that there aren't enough.
www.guardian.co.uk/business/2010/aug/15/aa-saga-private-equity
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