Stagecoach Group PLC (LSE:SGC), which is due to delist from the London Stock Exchange in June as part of a take-private by DWS Infrastructure, has acquired new bus and depot operations in London from Kelsian Group.
The bus and coach operator has agreed to buy the east London bus operations and Lea Interchange depot from the Australia-based transport operator for £20mln.
It told shareholders today that it will shell out an initial £10m on the deal, which will be structured so that it pays a further £1mln a year for the next decade.
Stagecoach expects its net debt “to increase by around a further £20mln” in connection with vehicle and property lease liabilities, it said in a statement.
The Lea Interchange depot, which is located near busy London station Stratford International, already operates 11 bus contracts with Transport for London that the company said represents about £38mln of turnover, with a platform to expand its contracts further.
"This targeted acquisition provides operational and margin improvement opportunities that we have successfully delivered at our other London bus depots,” said Stagecoach’s chief executive Martin Griffiths.
Stagecoach's share price closed at 104.7p yesterday and markets were relatively unmoved this morning, plateauing at around 104.76p by mid-morning, which may reflect its imminent delisting from the stock exchange.
Stagecoach said yesterday that it will delist its shares from the London Stock Exchange by late June, after its founder Brian Souter accepted an all-cash bid for the company.
Souter accepted a bid for a majority of its shareholding from Inframobility UK Bidco Ltd, a bidco set up this year by DWS Infrastructure that is indirectly owned by DWS’s Pan-European Infrastructure III fund.
Inframobility’s offer for the company values its share capital at approximately £594.9 million, or 105 pence per share, the infrastructure investor said in March.
The offer for the bus and coach operator became unconditional on 20 May.
Souter accepted the offer for 80,167,309 shares in the company, which represents a controlling stake of over 81%.
The delisting is expected to be completed by 27 June 2022.
Four employees of DWS Infrastructure including Hamish Mackenzie, Scott Auty, Miguel Costa and Florian Hubel are expected to join Stagecoach's board as non-executive directors in connection with the takeover.
Existing directors in the company, Stagecoach’s chairman Ray O’Toole, chief executive Martin Griffiths, finance director Ross Paterson and non-executive director Lynne Weedall will continue to sit on its board.
The company’s remaining non-executive directors, including Souter himself, will step down.