Friday, 18 May 2012

Stagecoach Pay £100m for Assets of Coach America

Stagecoach is to acquire businesses and assets from Coach America which has been operating under Chapter 11 bankruptcy protection since January 2012.  The transaction is subject to the approval of the United States Bankruptcy Court of Delaware.

Stagecoach has agreed to acquire:
1. Certain businesses and related assets and liabilities, for a cash
consideration of US$134.2m (approximately £85m) and;
2. at the option of the Sellers, up to 85 further coaches for a cash
consideration of up to US$25.6m (approximately £16m).

The businesses being acquired include contract, line-run, charter and
sightseeing operations. The transaction enables Stagecoach to acquire selected
businesses at an attractive price and to acquire vehicles as part of its capital
expenditure programme.

The businesses to be acquired include operations in Texas and California, which
will provide depot infrastructure to enable Stagecoach to expand its megabus.com
budget coach network more efficiently, more quickly and under its full control,
whilst avoiding the need to pay a sub-contract profit margin in these locations.
In addition, Coach America's Atlanta business is the existing sub-contractor of
the megabus.com Atlanta hub and that business is amongst those to be acquired.

The nine businesses being acquired are located in:
- San Antonio and Dallas, Texas
- Sacramento, California
- Anaheim, California
- Atlanta, Georgia
- Cleveland, Ohio
- Gillette, Wyoming
- Elko, Nevada
- Hanover, Maryland
- Portland, Oregon
Stagecoach Group Chief Executive, Sir Brian Souter, said: "Our North American
division is the fastest growing part of the Group and this transaction will
allow us to acquire selected businesses and vehicles at attractive prices in
markets and regions we know well. These businesses will benefit from both our
management expertise and ability to invest for growth.

"We see significant potential to roll-out megabus.com's successful package of
low fares and high quality service to new locations in the United States. The
acquisitions in Texas and California in particular will give us an extended
geographic footprint to accelerate our growth strategy for the brand, which
already covers around 80 key locations in North America."

http://otp.investis.com/clients/uk/stagecoach/rns/regulatory-story.aspx?cid=273&newsid=250178

http://coachamerica.com/home/

David Gambles

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