National Express buys into Canada

National Express yesterday increased its presence in the North American school bus market with the £74m acquisition of Canada's biggest privately owned operator.

The takeover of the Toronto-based company, Stock, will make multi-millionaires out of the two cousins who run the company and provide National Express with a toehold in the Canadian market.

National Express already owns Durham, one of the biggest school bus operators in the US. The Stock deal will increase its North American school bus fleet by 25 per cent to more than 10,500 buses, transporting 360,000 students a day.

William Rollason, National Express' finance director, said there was plenty of scope for expansion in Canada, where 75 per cent of school bus services are privatised. There are an estimated 1,400 operators, the majority of which are small family owned companies.

Stock, which operates in Nova Scotia and Ontario with a fleet of 2,200 buses and 2,600 staff, made operating profits of C$25m (£11m) in the year to 31 May on turnover of C$87m. Brian Stock, the president of the company, will become chief operating officer of a new National Express Canadian division while his cousin, Barry, will be a senior vice-president for new business development.

The price for Stock is equivalent to six and a half times its historic profits before interest, depreciation and amortisation but Mr Rollason said National Express expected to pick up further Canadian companies more cheaply.