Grimsby bus firm falls to Stagecoach: Deal broadens geographical spread

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STAGECOACH, Britain's largest quoted bus operator, continued on its acquisition trail yesterday, picking up its first municipal bus company for a total of pounds 4.7m.

The group is paying pounds 4.4m cash for Grimsby-Cleethorpes Transport Company (GCT), but will also give the vendors - the borough councils of Grimsby and Cleethorpes - a pounds 300,000 pre-acquisition dividend.

GCT, formed in 1986 to run municipal bus services in Greater Grimsby, has 100 buses and coaches and employs about 200 people. It made profits of pounds 620,000 before tax on turnover of pounds 6.6m in the year to the end of March.

Derek Scott, Stagecoach's finance director, said the deal broadened the group's geographical penetration - it was hitherto concentrated on the Midlands and the west coast of Scotland.

'We're very pleased to have won the race for CGT, as there were reportedly 15 bids for it. We understand we just shaded it, so we got the price exactly right.'

He added that it was a very well- run operation so would not divert management attention.

Brian Souter, chairman, said the purchase continued Stagecoach's growth momentum since its stock market flotation in April.

Mr Scott said there were still opportunities for further acquisitions. 'The deregulation measures announced in the Queen's Speech this week may lead to more municipal bus company privatisations.'

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