The company – starting up
In 1905 William John Bosworth founded The Automobile Association, or The AA, as it became known. It began life as a charitable association for helping motorists avoid police speed traps, which were introduced as part of the Motor Car Act 1903, but its activities diversified pretty quickly. Its first handbook for drivers was produced in 1908, and its roadside assistance telephone boxes began appearing in 1912. Its first Guide to Hotels and Restaurants in Great Britain and Ireland was published in 1967.
In the 1970s The AA head office moved from central London to Basingstoke. It remained a mutual – albeit a somewhat opaquely-run one – until 1999, when it became a private company. That paved the way for the business to be taken over by Centrica later that same year.
In 2004, CVC and Permira took over the AA and leverage was used to expand the brand; used-car sales platform AA Cars was launched in 2013.
The AA was listed on the London Stock Exchange in 2014 at a market cap of £1.4bn, but things didn’t go to plan. Amidst tensions, executive chairman Bob Mackenzie, who led the flotation, was fired – reportedly for a punch-up with a colleague.
In 2021, it returned to private equity ownership, when a consortium led by TowerBrook Capital and Warburg Pincus took the business private for just £219m. That came laden with £2.6bn of debt.
The personality – driving decisions
Jakob Pfaudler (pictured below), who became CEO of the AA in 2021, spent 16 years in various roles at Lloyds Banking Group. Brought in when the PE consortium led by TowerBrook Capital and Warburg Pincus took over the business, he set about tackling the business’s issues with some actions that seemed simple, but have proved effective. He strengthened the balance sheet by paying down debt and, during last financial year, the business refinanced a £165m senior term facility and a £56m working capital facility with a US private placement transaction.
During the same period The AA hit a record 17 million customers and FY25 EBITDA grew 8%, to £243m.
Announcing those results, Pfaudler said: “We have continued to enhance The AA’s customer proposition, innovating our services through the use of data and AI, delivering deeper customer engagement, business efficiency and productivity.”
Tom Mackay, a chartered accountant who trained with EY and was previously CFO of Virgin Atlantic, joined just after Pfaudler as CFO.
Gordon Holmes, an experienced MD at TowerBrook, represents the private equity firm on the board of The AA.
Rick Haythornthwaite, chairman of NatWest Group, is non-exec chair.
The future – running smoothly
Once marketed as the UK’s fourth emergency service, much to the irritation of HM Coastguard and mountain rescue services, The AA is the UK’s biggest roadside recovery business.
There are now reports that its PE owners – TowerBrook Capital, Warburg Pincus and Stonepeak – are preparing for exit. As reports circulated that its only rival, the RAC, was seeking a £5bn stock market listing, the FT reported at the end of 2025 that The AA had appointed Rothschild and JPMorgan as advisers to examine sales options – and that The AA would also be priced at £5bn. That would be a decent turnaround for investors who paid just £219m for the business in 2021.
About 15% of the UK population is a member of The AA and numbers are growing as the motoring landscape changes. Sales of petrol and diesel cars are down as motorists make the switch to electric vehicles (EVs) or choose to hold on to their old cars longer, wary of pro-EV legislation making fossil fuel-powered cars more expensive to run. Whether it’s the uncertainty that goes with a new technology, or the increased risk that comes with older machinery, both sets of motorists are especially keen to be covered for any problems they may have.
The AA has also recently signed a deal with OpenAI to work with its insurance, driving schools and mobile repair van businesses.
Just last month, Sky News reported that private equity firm EQT was in the driving seat to acquire The AA.
EQT is a Swedish-headquartered global private equity firm with more than 300 portfolio companies worldwide and €266bn of assets under management, in a wide range of sectors, but with a focus on financial services, tech and green energy. The AA might benefit from the firm’s expertise in all three areas.
