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SeaLink to acquire Transit Systems
Posted on Tuesday, 08 October 2019 09:47
SeaLink Travel is acquiring Australia’s largest private operator of metropolitan public bus services, and an established international player in London and Singapore, for AUD 698.00 million (USD 470.58 million) in cash and shares.
Transit Systems Group comprises Transit Systems and Tower Transit and was founded in Perth in 1995 after successfully tendering for a local contract.
In 2013, it gained a foothold in London through the acquisition of part of the city operations of FirstGroup and become the first international operator of public bus services in Singapore in 2015 by winning a competitive tender.
Transit Systems currently operates 3,129 vehicles across 40 agreements in Australia, London and Singapore on behalf of governments, transport authorities and private bodies.
Based on pro forma financials for the unaudited 12 months ended 30th June 2019, the group had revenue of AUD 895.00 million.
It also had pro forma FY 2019 earnings before interest, tax, depreciation and amortisation (EBITDA) of AUD 78.00 million and earnings before interest of AUD 61.00 million.
SeaLink noted the enterprise value of AUD 635.00 million does not include an earnout of up AUD 63.00 million and equates to 8.2x FY 2019 anticipated normalised EBITDA.
The group intends to fund the cash portion of the deal through a fully underwritten AUD 65.00 million placement to new and existing institutional shareholders and a rights issue worth AUD 89.00 million.
It will pay off the balance with new scrips worth AUD 269.00 million and by drawing down on new multi-tranche debt and revolving credit facilities.
As a result, certain vendors of Transit Systems will become substantial shareholders of the enlarged SeaLink and are expected to hold in aggregate a stake of 33.4 per cent.
Zephyr, the M&A database published by Bureau van Dijk, shows the deal is one of the largest of an Australian air, rail, water, truck, passenger transportation company on record.
It is also SeaLink’s biggest-ever acquisition and provides a springboard for growth, both at home and abroad.
© Zephus Ltd