Breakdown recovery group AA plc (LON:AA.) is selling its Irish business and operations to private equity group Carlyle for €156.6mln.
AA, which provides insurance intermediary services and motoring services to private individuals and corporates in Ireland, is selling the assets to Carlyle Cardinal Ireland Fund, L.P. and Carlyle Global Financial Services Partners II, L.P.
The deal depends on regulatory approval and is expected to complete in late July. AA Ireland will continue to be able to use the AA brand.
The AA has also agreed to provide certain transitional services to AA Ireland and will retain responsibility for the defined benefit pension plan of AA Ireland.
As at 31 January 2016, AA Ireland had generated profits before tax of €12m and had gross assets of €163m. The executive team of AA Ireland, led by chief executive Brendan Nevin, will invest in AA Ireland alongside Carlyle.
AA said it had decided to sell the Irish arm because as an insurance broker-led business, AA Ireland differs significantly from the AA's UK business, and savings and potential cross-selling opportunities were limited.
The AA intends to use the net cash proceeds to partly repay debt.
Bob Mackenzie, executive chairman of the AA, said: "After a competitive process, we are very pleased to have reached agreement to sell AA Ireland. We believe this is a good result for our shareholders and for AA Ireland and its employees.
"I would like to thank our 450 Irish colleagues for their dedication, professionalism and service to our customers, which has resulted in the creation of a great business. I am confident that the agreement with Carlyle and CCI presents an exciting opportunity for their continued success."
Dean Street Advisers acted as advisers to the AA on the deal.