Quindell, a market leading global provider of professional services and digital solutions, announces the restructuring of the terms of its joint investment with RAC in Connected Car Solutions (CCS).
On 7 April 2014, Quindell announced a joint investment with RAC in a new company, CCS, to distribute Quindell and RAC’s combined connected car capabilities.
Due to market conditions beyond the control of either Quindell or RAC, the parties have concluded that it is not the best use of capital for either party to finance a free telematics roll out to consumers as initially planned.
It is now in the best interests of both parties to restructure CCS and for Quindell to acquire RAC’s interest in CCS and continue their strong working relationship both in respect of existing contracts and in the future.
Quindell acquires all of RAC’s shares in CCS so that Quindell now owns 100% of CCS.
Quindell capex for RAC box roll-out eliminated with positive impact on Quindell’s previously forecast cash flow in 2014 and 2015 of c. £10m and c. £20m respectively.
Quindell retains over 600,000 connections (including c. 200,000 phone-based apps) of which c. 50% are in the territory covered by CCS.
RAC buys back its brand licence, customers and sales pipeline in relation to telematics (c.7,500 connections plus sales pipeline primarily in fleet).
RAC acquires an independent licence for certain device-based Quindell and CCS telematics technology with no future royalties or licence fees to pay to Quindell or other CCS related parties for its use (excluding Himex Digital World technology).
Quindell and RAC are discussing the use of Quindell’s ingenie insurance proposition for RAC members
Quindell currently has over 600,000 connections (including c.200,000 phone-based apps) in global connected car solutions, growing rapidly, through new and existing relationships.
Rob Terry, Chairman of Quindell, said: "The relationship between RAC and Quindell remains strong and we will continue to work closely together in key areas, including in relation to the servicing of claims arising from RAC’s connected car offering and potentially through the ingenie brand. These revised terms are in the best interests of both companies."