STAGECOACH has ramped up its presence in London after striking a deal to acquire Kelsian Group's east London bus operations and depot for £20 million.
The Scottish transport giant declared that the acquisition was a “good strategic fit” for its existing operations in east and south-east London, adding that it provides a “positive platform” from which to bid for new contracts in the area.
The deal includes the Lea Interchange depot, located close to Stratford which Stagecoach said is the busiest station in the UK. It operates 11 contracts on behalf of Transport for London (TfL) with a fleet of around 150 buses, turning over about £38m.
READ MORE: Aberdeen’s FirstGroup mulls takeover approach worth £1.2bn
Stagecoach will pay an initial £10m on completion of the acquisition. A further £1m will be payable per annum for 10 years starting on the first anniversary following completion subject to certain conditions.
Martin Griffiths, chief executive of Stagecoach, said: We have an extensive track-record of operating high-quality and profitable bus services on behalf of Transport for London.
"This targeted acquisition provides operational and margin improvement opportunities that we have successfully delivered at our other London bus depots.
"We look forward to working with TfL to deliver even better bus links to local communities in east London and also helping support the Mayor's drive to deliver a net zero transport system."
The acquisition comes a week after DWS, the German infrastructure investor, saw its £595 million bid for Stagecoach declared unconditional.
On Thursday, FirstGroup said it was considering a takeover approach from private equity outfit I Squared Capital that values the company at up to £1.23 billion.
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