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AA to sell training arm

Automotive support services company Carter & Carter Group has announced proposals to buy the AA’s technical services operation, which provides training and helpline support to a number of carmakers’ franchise networks.

The move is the latest in a trimming-down of the AA’s business since its acquisition by venture capital firms CVC Partners and Permira last July. In October, the organisation announced it would cut 1,300 jobs and close its tyre-fitting and servicing outlets. Fifty service centres were subsequently sold to Nationwide Autocentres.

Carter & Carter’s acquisition, for an undisclosed sum, will mean the transfer of the AA’s operation, including more than 100 staff and a training facility near Melton Mowbray in Leicestershire, into Carter & Carter’s training subsidiary, EMTEC Specialised Services Ltd. However they will continue at their current workplaces. EMTEC was bought by Carter & Carter in 2003 and already accounts for around half its £38.2m annual turnover.

“This acquisition further extends the depth and breadth of the technical expertise available to our clients and I am confident the acquisition will prove to be a sound strategic move for the group,” says Phillip Carter, chief executive.

Rod Castle, director of group strategy and planning, says the purchase will boost activity with existing clients, rather than dramatically increase its customer base, as the company already works with 26 vehicle manufacturers and their dealer networks.

Chris Clibbery, AA general manager, road services, says the technical support operation “does not form part of the future core business plan”. He says the company plans to retain its recovery, publishing, driving school, insurance and event signs businesses.

The AA purchase is less than two weeks after Peterborough-based Carter & Carter announced plans to float on the Stock Exchange. The move, which takes place next month, should raise £20m for acquisitions and debt reductions. Market capitalisation is expected to be between £70m-£80m.

The flotation will allow private equity group Bridgepoint, which invested £10m in a 47% share four years ago, to exit making £30m, while Phillip Carter is forecast to receive £8m for selling part of his 46% shareholding.

  • The AA has appointed ex-Orange UK boss Ian Fraser as Kwik-Fit CEO replacing Tim Parker who became AA chief executive last summer.
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