RAC

RAC Ltd

RAC Ltd

Industry
Consumer & Retail
Region/Country
Birmingham, U.K.
Fund(s)
Carlyle Europe Partners III
Acquired
Status
Exited

About RAC and the Transaction
RAC is the Motorist’s Champion with the goal of being the ‘one-stop shop’ for motorists. RAC offers a vehicle and breakdown service that is available 24 hours a day, 365 days a year through a nationwide, branded patrol force of approximately 1500, focusing on vehicle repair and recovery. RAC also provides motor insurance broking services and offers a suite of legal and motoring services including an online shop and RAC Cars, a used-car sales channel.

The company, which has been owned by The Carlyle Group since 2011, is headquartered in Birmingham and employs around 3800 people.

Key Achievements Since Carlyle Investment in 2011
To date RAC has performed well, demonstrating strong growth in profitability and high cash conversion. Since Carlyle’s acquisition of the company in September 2011, EBITDA has grown from £100 million in 2011 to £183 million for 2015. Some of the key value creation initiatives included:

  • Completed a complex separation from Aviva
  • Delivered significant operational efficiencies
  • Drove strong performance in the breakdown business and returned the Individual Members business to growth after several years of declining file size
  • Continued to diversify RAC by growing the profitability of the insurance business and expanded its product offering into new areas such as Telematics
  • Positioned the company for future growth through the upgrading of IT systems and sustained investment in the company’s brand and the development of a database to enable enhanced sales and marketing

Key Environment and Sustainability Achievements
As a responsible automotive services provider the RAC recognizes that its activities, products and services have an impact on the environment.

As such, RAC is committed to not only being compliant with all relevant environmental legislation and regulations, but also to the principles of prevention of pollution and to continuous improvement by introducing ISO14001 environmental management systems across all RAC sites and roadside operations. RAC will continue to take a lead in influencing motorist behavior, government transport strategy and motor industry practices as together we can reduce the impact on the environment from motoring.

Emissions
RAC continues to look for ways to reduce its carbon emissions whether this is through investment in new technology, education and raising awareness or better organization. RAC’s carbon reduction plan aims to deliver a further reduction in CO2 output in 2014. A number of fleet initiatives that were introduced in 2013 have included “Smarter Driver Training” for all company drivers, a vehicle replacement program and the installation of telematics units in all patrol vehicles to monitor and improve driving behaviors. To date these have contributed to a 10% reduction in fuel usage per service breakdown in the RAC fleet.

There has also been a significant investment in information technology across the business which includes cloud-based collaboration solutions that will enable colleagues to operate remotely which will further reduce the need for business travel and commuting in 2014 as we embed these technology solutions into our business practices.

Waste and Recycling
RAC has established business waste management and recycling programs at its sites and across its fleet operation. Disposal methods for waste are determined through the collaborative efforts of the Group and its waste management partners. Working together, new opportunities have been identified for recycling waste and reducing usage of incineration and landfill. Wherever possible waste is recycled and several of the Group’s waste streams are recycled in innovative ways including furniture being recycled into animal bedding, carpet underlay and note books and contaminated fuel being recycled so it can be used again.

Reducing Energy, Water and Paper Consumption
There have been various improvements introduced to reduce energy, water and paper consumption. The Group has seen an overall reduction of 12% for gas and electricity and an over 50% reduction in the amount of paper being printed in RAC offices. Improvements to drainage and pumps that distribute water, new PC and monitor reporting systems to ensure that PCs are switched off overnight, switching to LED when replacing or introducing new lighting and the implementation of a strict temperature control policy have all helped to reduce the Group’s consumption of resources. RAC has also introduced new printers across its sites that automatically print double-sided and in black and white. Printing is also controlled by colleagues’ security tags which has not only reduced the amount of paper and printer cartridges used, but has also increased security of information.

Exit
In late 2014, Carlyle completed the partial sale of RAC to GIC, Singapore’s sovereign wealth fund.  Carlyle sold its remaining stake to CVC in April 2016