It’s happening – insurance and roadside assistance provider AA Plc is being sold for 35 pence per share.

The AA announced that terms of the cash acquisition have been agreed between its board and that of Basing Bidco Limited, the newly incorporated entity owned by the TowerBrook-Warburg Pincus consortium. The abovementioned price tag values The AA at approximately £219 million.

“The consortium recognises that the core strengths of The AA lie in its iconic brand, market-leading positions, and skilled and committed workforce,” stated the snapped up firm in its announcement. “However, the consortium believes that The AA has been held back as a result of underinvestment and high levels of debt.

“The consortium intends to inject additional funds into The AA to deleverage the business and provide it with the operational freedom to drive the business forward, to better serve its customers and capitalise on its considerable strengths.”

Read more: The AA outlines takeover proposal

It was noted that the buyers are of the view that The AA needs “committed, long-term” owners to support its growth. Among the critical areas they are looking to invest in is IT transformation.

The consortium has also committed to fully safeguard the existing employment rights of The AA’s management and employees, including in relation to pensions.

Meanwhile AA Plc chair John Leach said the board is unanimously recommending the transaction to shareholders. The board believes the takeover is in the best interests of The AA as well as its shareholders and wider stakeholders.     

As an alternative to the cash offer, though, eligible shareholders may elect to receive one Topco unit for each AA share. Each Topco unit comprises 2.8636363636 Topco B preference shares and 0.3181818182 Topco B ordinary shares.