Stagecoach gets back on the buses with £60m East London deal
Saturday 16 October 2010
The transport giant Stagecoach is re-entering the London bus market after buying back a business it sold in 2006 for a fraction of the price.
It will pay Macquarie £59.5m for East London Bus Group, the capital's third-largest bus operator, just four years after it sold the business to the Australian bank for £264m. At the time of the sale, Macquarie said the bus company was desirable for its predictable cash flow. But profits sank steadily and the company was sold as part of a "pre-pack" administration conducted by KPMG.
Brian Souter, the Stagecoach chief executive, said: "We operated a successful bus business in London for several years and are pleased to re-enter the London bus market at what we consider to be an attractive price."
Mr Souter said that while he recognised the challenge presented by the ailing East London Bus Group, he was relishing the chance to turn around a struggling business. His plan is to both improve the operational performance of the company and to cut its back-office costs through synergies with the parent group.
"Through our previous ownership of the business, we are familiar with the regulated London tender environment and have a track record of operating successfully and profitably in this market," Stagecoach said in a statement.
The £59.5m cost price, which will be funded from cash and Stagecoach's existing, undrawn bank facilities, includes the settlement of outstanding inter-company liabilities and East London Bus Group's £6.7m in cash held at the time of the sale.
East London Bus Group operates 1,400 buses from 10 depots across the capital and maintains a 15 per cent share of the market. For the year to April, it generated revenues of £254m, mostlyfrom a fixed-fee contract with Transport for London.
- 1 The West has it totally wrong on Lee Kuan Yew
- 2 Watch: Man takes selfie every mile of 2,600 mile hike, creates amazing timelapse video
- 3 The day I starred in Only Fools and Horses
- 4 #FreeTheNipple: Women in Iceland bare breasts in solidarity with trolled student
- 5 Scientists have discovered a simple way to cook rice that dramatically cuts the calories
Germanwings captain Patrick Sondenheimer tried to break into locked cockpit door 'with an axe' as plane was descending
Saudi Arabia says it won't rule out building nuclear weapons
The battle for the Middle East's future begins in Yemen as Saudi Arabia jumps into the abyss
Jeremy Clarkson 'could be given minder' ahead of a potential Top Gear return
#FreeTheNipple: Women in Iceland bare breasts in solidarity with trolled student
Ukip supporters are 55 or older, white and socially conservative, finds British Social Attitudes Report
JK Rowling responds to fan tweeting she 'can't see' Dumbledore being gay
Jeremy Clarkson sacked live: Alan Yentob 'wouldn't rule out' ex Top Gear host's BBC return
Revealed: Putin's army of pro-Kremlin bloggers
Germanwings plane crash: Co-pilot Andreas Lubitz wanted to 'do something people would remember him for'
Andreas Lubitz: Knee-jerk reaction to 9/11 enabled mass murder
iJobs Money & Business
Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...
Negotiable: Recruitment Genius: You will be the first point of contact for all...
£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...
£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...