PARIS (dpa-AFX) - FirstGroup Plc (FGROY.PK), a provider of public transport services in the UK, announced Tuesday that it has signed an agreement to acquire bus operator RATP Dev Transit London Limited and its units from France's RATP Développement SA for an enterprise value of 90 million pounds.
The company said the enterprise value is underpinned by around 100 million pounds of physical assets including freehold property of around 50 million pounds.
RATP London is one of the principal bus operators in London, with around 12% market share. It has 10 depots across Central and West London, in which four owned and six leased; as well as a fleet of around 1,000 buses of which a third are fully electric. The company has around 3,700 employees, over 80% of whom are drivers. RATP London's current management team will transfer with the business and are expected to be retained post-acquisition.
In 2023, RATP London's revenues reached 271 million pounds.
The acquisition will be financed with 45 million pounds from the company's existing cash reserves and the assumption of RATP London's asset backed vehicle finances leases.
Following the deal closure, FirstGroup expects the acquisition to be broadly earnings neutral in fiscal 2025 and 2026.
As the route contract portfolio evolves over the next five years, annual revenues are expected to grow to 300 million pounds to 350 million pounds, with operating margins in line with historical London levels of c.6-7%.
The Acquisition is subject to French government approval, in its capacity as the ultimate owner of the business, and is conditional on TfL consent to the change of control.
FirstGroup anticipates completion of the acquisition in first half of calendar year 2025.
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