FIRSTGROUP has said it expects an $85 million earn-out related to the sale of its former North American business, First Transit.
The Aberdeen-based transport company told the City that after the sale in the US to Swedish firm EQT Infrastructure it has been told that affiliates of the private equity group have signed an agreement to sell First Transit to Transdev North America Inc, which is a US and Canada-focused subsidiary of Transdev, the French transport giant.
FirstGroup said the news represents a milestone in its plans to refocus on UK bus and rail, and the earn-out will “further strengthen” its business.
It comes after the Scottish company withdrew its business from the US, with the sale of First Student and First Transit to EQT for $4.6 billion, and the disposal of Greyhound to European bus and rail firm FlixMobility, for $172m.
READ MORE: Scottish transport giant unveils new chief
FirstGroup said: “FirstGroup currently estimates the earn-out consideration to be around $85m. Based on this estimate, FirstGroup is expected to record a non-cash loss of (around) £30m relative to the carrying value of the earnout of £106m as at March 26, 2022.”
The sale by EQT is subject to conditions including regulatory and clearance processes in the US and Canada.
Graham Sutherland, FirstGroup chief executive, said: "Receipt of the First Transit earn-out proceeds will be another milestone in the transformation that FirstGroup has undertaken in recent years to refocus on our strong positions in UK bus and rail.
"The earn-out proceeds will further strengthen our business, which is now a resilient and robust platform with a range of opportunities for growth and shareholder value creation."
It said the final earn-out amount will be set after the sale by EQT.
Shares in FirstGroup were 1.7 per cent lower in early trading and closed at 108.5p, down 0.55%, or 0.6p.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here