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Dealwatch: Linklaters, Freshfields and Travers Smith fix RAC deal with Singapore sovereign wealth fund

Linklaters’ corporate heavyweight Charlie Jacobs and private equity partner Alex Woodward advised US private equity firm Carlyle on the sale of half of its majority stake in roadside recovery service RAC after abandoning plans to exit the company through a London IPO.

The sale to Singapore’s sovereign wealth fund GIC comes three years after Carlyle purchased a majority stake in RAC, the UK’s second largest roadside recovery provider with 8 million members, for £1bn. Market analysts believe RAC is now worth close to £2bn, which means Carlyle is likely to have recouped most, if not all of its initial investment while maintaining 50% of its holding.

GIC rehired Freshfields Bruckhaus Deringer, which advised the fund on its acquisition of a 28.5% stake in UK pension insurer Rothesay Life from Goldman Sachs in October 2013, to run its deal for RAC. The transaction was led by London corporate partners Richard Thexton and David Higgins, with support from corporate colleague Adrian Maguire and senior associate Holly Kinchin-Smith.

David Higgins, co-head of Freshfields’ global financial investors group, said: ‘Today’s deal with GIC demonstrates that, despite the current strength of the equity markets, financial investors can still compete with M&A options.’

Linklaters’ Jacobs and Woodward were assisted by a team that included London private partners Stuart Boyd and Nicole Kar, as well as corporate partner John Lane and associate James Wootton. The corporate team were set to run the IPO, with London-based Latham & Watkins corporate partners Richard Brown and James Inness advising the underwriters in the run up. Meanwhile, Travers Smith senior partner Chris Hale acted for RAC management on the deal which increased its stake in the company from 15% to 20%.