Close Brothers was retained in March 2007 to advise the board of Saga on future ownership options with a primary focus on an IPO. Close Brothers supported the company in selecting the most suitable advisers for the IPO, designing the syndicate structure, securing market leading fee arrangements and negotiating terms for management.
Following the broker syndicate appointment on 11 May, Close Brothers continued to provide independent financial advice to the board and over the course of the assignment received a number of expressions of interest from potential acquirers.
On 21 June 2007, the combination of Saga with the UK's Automobile Association was announced, placing two of the UK's leading retail brands with over 17 million customers under common ownership. The transaction values Saga at £2.8bn and the AA at £3.35bn. The principal shareholders in the combined group will be Charterhouse (previous owner of Saga), CVC Capital Partners and Permira (previous owners of the AA), alongside management and staff.
Saga's business includes insurance, financial services, holidays, cruises, magazine publishing and other products all targeted at people aged 50 and over. The AA is the UK's leading motoring organisation with around 15 million members; its businesses also include insurance broking, publishing and a driving school.
Andrew Goodsell, Chief Executive of Saga and the new holding company commented:
"We were very pleased with the way Close Brothers supported us during the IPO preparation phase. Close helped us to appoint the best advisory team on highly attractive terms and also managed to reduce our workload significantly. We would recommend Close Brothers' services to any other company in our position."
Gareth Healy, Head of IPO Advisory at Close Brothers commented:
"We are delighted to have been chosen as Saga's IPO advisers. It is a tremendous business and its desirability as a client for IPO bookrunners enabled us to achieve record fee structures and terms. The ultimate outcome was a combination which has created one of the UK's largest private companies and we are proud to be associated with this transaction as independent financial adviser."
For more information regarding the transaction, please contact Richard Grainger, Gareth Healy, Michael Dubois, Guy Gillett or Harry Kalmanowicz on +44 (0) 20 7655 3100.