The management and staff of Saga, the over-50s insurance and travel business owned by Charterhouse Capital Partners, will enjoy a £280 million payout following the company’s £6 billion merger with Permira and CVC Capital Partners’ motoring business the AA.
The total includes a £108 million payout to Saga chief executive Andrew Goodsell, who becomes chief executive of the combined group, and £50 million payouts to finance director Stuart Howard and marketing director Tim Bull, who each had a 4 percent stake, the source said.
A company spokesman said the deal had also been lucrative for the 80 percent of staff who chose to pay £20 for an equity stake in the company in 2004, when Charterhouse completed a £1.35 billion management buyout of the company. They have now received £10,500 each for 75 percent of this stake, while they are re-investing the remaining 25 percent in the company.
Permira and CVC will hold a combined 42.5 percent of the merged company, while Charterhouse will take 37.5 percent. Saga and AA staff will own 20 percent, including Goodsell’s stake of 6 percent, according to the source. A Saga spokesperson said: “He is rolling forward a substantial investment.”
Around 1000 AA staff have also received £9000 from their original £2500 investments at the time of the £1.75 billion takeover by Permira and CVC, according to people close to the deal. Departing AA chief executive Tim Parker is expected to make about £40 million, although the GMB trade union has insisted the true figure is nearer £80 million.
Goodsell told the UK newspaper Financial Times that the deal would create “an entity worth enough to make it right to the top of the FTSE.” The company’s market capitalisation of £6.2 billion would situate the company as the 50th company on the UK stock exchange, above Experian Group which has a market capitalisation of just over £6 billion.
Saga’s spokesperson said “a flotation is definitely on the cards.”