Bloomberg News

Carlyle Hires Banks to Arrange Debt to Finance RAC Buyout

June 23, 2011

(Updates with LBO loans in first paragraph)

June 23 (Bloomberg) -- Carlyle Group hired banks to arrange 620 million pounds ($990.6 million) of leveraged loans for its acquisition of Aviva Plc’s RAC division, according to two people with direct knowledge of the transaction said.

BNP Paribas SA, Credit Suisse Group AG, JPMorgan Chase & Co., Morgan Stanley and UBS AG are leading the financing, which includes 520 million pounds of term loan B targeting loan funds, and 100 million pounds of undrawn debt, said the people, who declined to be identified because the deal is private.

Carlyle agreed to buy the Birmingham, England-based RAC in a sale valuing the roadside recovery company at 1 billion pounds, or 17 times its 2010 net earnings, Aviva said today in a statement.

Rosanna Konarzewski, a Carlyle spokeswoman in London, declined to comment on the financing.

Aviva paid 1.2 billion pounds including debt for the RAC in 2005 and spun off its windscreen-repair and driving-school parts in the intervening years. The company’s origins date back to a London-based private members’ club founded in 1897. It became the Royal Automobile Club in 1907 after gaining approval from King Edward VII. RAC rescuers attended 2.5 million breakdowns last year, according to its website.

Carlyle’s investments in the automotive industry includes car-rental firm Hertz Corp. The private-equity firm has announced seven acquisitions in Europe in the past year and is preparing for an initial public offering.

--With assistance from Kevin Crowley in London. Editors: Faris Khan, Chapin Wright

To contact the reporter on this story: Patricia Kuo in London at pkuo2@bloomberg.net

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net


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