Stagecoach makes 27m pounds acquisition
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STAGECOACH, the bus and coach company based in Perth, is raising pounds 27.5m through a placing to buy Busways, an operator in the North-east with a 600-strong vehicle fleet, writes Russell Hotten.
Busways, a management buy-out in 1989, becomes Stagecoach's 20th operating unit and increases the company's fleet to 5,000 vehicles. About 3.3 million new Stagecoach shares are being placed at 173p.
'Busways is a substantial business in good bus territory where we have had no presence,' said Brian Souter, chairman of Stagecoach. 'It puts us into a large urban conurbation of about 2 million people.' Stagecoach has traditionally operated in smaller cities with populations of no more than 200,000.
In the year to March, Busways made profits after tax of pounds 2.8m on turnover of pounds 42.5m.
The company employs 1,750 in Newcastle, Sunderland and South Shields.
The Busways deal is the fifth acquisition since last July, when Stagecoach bought East Kent buses for pounds 5m. Earlier this month it announced it was buying Western Scottish Holdings for pounds 6m.
Yesterday's announcment was accompanied by a positive trading statement. Mr Souter said the group would continue to pursue acquisitions the directors believed increased shareholder value.
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