RAC Owners Plot £5bn Sale or IPO: What’s Next for the Company?

RAC, one of the UK’s oldest roadside assistance companies, might be heading for a big change. Its private equity owners are now exploring two major options: a £5 billion sale or a public listing. That’s a huge number and a big decision.

Founded in 1897, RAC has grown from a simple motoring club to a household name. Most of us know it for helping broken-down cars. But behind the scenes, it’s also a powerful business with millions of members and a strong brand.

So why are its owners thinking of selling or going public now? What’s the plan, and what does this mean for the company’s future?

Let’s explore RAC’s past, why the sale or IPO is being considered now, and what could happen next. 

Background: RAC’s Ownership & Evolution

RAC began life in 1897 as a motoring club. It grew into one of the UK’s best-known roadside assistance brands. In 2011, the Carlyle Group bought it for about £1 billion. Since then, ownership has shifted: today, CVC Capital Partners and Singapore’s GIC are key backers. In 2021, Silver Lake, a U.S. tech-focused investor, joined as co‑ co-shareholder.

RAC added almost 4 million members between 2016 and 2021 under these owners. It increased its earnings before interest and tax at a roughly 7 percent annual rate, reaching £249 million by mid‑2021. We see a steady growth story built on membership, data, and digital tools.

Drivers Behind the Strategic Review

Now, reports say RAC’s private equity owners are exploring a sale or IPO that could value the business at up to £5 billion. That figure reflects confidence in RAC’s strong brand, loyal member base, and growing digital services.

We believe broader trends also matter. Private equity firms like CVC and GIC seek to unlock their investments. And investors today look for stable service companies with recurring revenue. RAC fits that bill well.

RAC only stalled IPO plans once before in 2014 under Carlyle ownership when market conditions weren’t favorable. Instead, GIC joined as an investor then. This time, owners seem more serious about exploring all options.

Possible Scenarios: Sale vs IPO

One option is a full sale. Buyers may include insurers, mobility firms, or infrastructure investors. A strategic buyer might pay a premium over public market value.

A second path is a public listing, most likely on the London Stock Exchange. An IPO would raise capital and boost RAC’s visibility. But it adds investor scrutiny and public market pressures.

Third, owners might opt for a partial sale or refinancing. They could sell part of the business to another investor while managing growth privately. That approach would preserve control but still deliver liquidity.

Valuation & Market Comparisons

The projected £5 billion price tag stands out. It is higher than the valuations we heard when Carlyle first weighed an IPO or sale around £2 billion in 2014. And it tops recent estimates for RAC’s main rival, AA, which was rumored to be worth around £4.5 billion if sold.

A higher valuation for RAC reflects its stronger earnings, lower debt, and better margin profile compared to the AA at a similar stage. It also owes to new assets like digital platforms, membership apps, insurance services, and EV charging support.

Opportunities & Risks

Owners have big opportunities. They could receive a major return on investment. An extra £5 billion sale or public listing will fund new tech and service expansion. It could pave the way for partnerships or acquisitions in the EV and mobility sectors.

Exclusive: The owners of the RAC, the roadside recovery service which traces its history back to 1897, are in talks about a prospective sale or flotation which could value it at about £5bn. The company is owned by CVC, Silver Lake and Singapore’s GIC. https://t.co/DatKvmsgzt

— Mark Kleinman (@MarkKleinmanSky) July 31, 2025

But risks exist too. If markets turn volatile, plans may stall. An IPO launch depends heavily on timing and investor sentiment. There are also regulatory hurdles in insurance and transport services. Competition from rivals like Green Flag or digital insurers could pressure future growth.

Timeline & Likely Next Steps

At present, reports say owners are lining up advisers and banks to evaluate options. We expect formal advisor appointments, such as investment banks or legal counsel, to occur soon.

No deal is likely to close immediately. Based on similar deals, a sale or IPO could take 12-18 months to complete. That could push any formal transaction into late 2025 or even 2026.

What to Watch Going Forward?

Six key signals are worth monitoring:

1. Which advisers are hired?
2. Any public expressions of interest from firms in insurance or mobility.
3. Regulatory filings or IPO prospectus drafts.
4. Updates on RAC’s financial performance or membership numbers.
5. Market sentiment for UK IPOs, especially for large service firms.
6. Public comments from owner firms like CVC, GIC, or Silver Lake.

Final Thoughts 

The RAC owners’ decision to weigh either a trade sale or IPO at a valuation near £5 billion reflects confidence in the brand’s strength and the stability of its business model. RAC looks attractive to buyers or public investors alike with growing digital assets and recurring revenue streams. But timing remains critical both for market conditions and regulatory factors. We will watch this space as advisors get appointed and strategy is clarified in the months ahead.

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Disclaimer:

This is for information only, not financial advice. Always do your research.