Stagecoach has announced that it will dispose of its North American division to an affiliate of Variant Equity Advisors in a deal that is worth a total of US$271.4 million (£214.8 million). The deal is expected to be completed by the end of the current financial year on 27 April 2019.
The cash proceeds will be used to reduce Stagecoach’s consolidated net debt and to allow it “to focus more closely on the significant opportunities for growth in the UK,” says Chief Executive Martin Griffiths.
Stagecoach’s North American arm includes Coach Canada, Coach USA and Megabus. It operates scheduled commuter and low-cost coach services along with charters, yellow school buses and local services.
“During our two decades in the North American transportation market, our success included reinvigorating the inter-city coach sector and delivering growth with our innovative megabus.con brand,” adds Mr Griffiths.
In the year to 27 October, Stagecoach reported revenues of US$619.4 million (£460.3 million) in its North American division, and an operating profit of US$21.7 million (£15.9 million) during the same period.
Referring to the group’s UK operations, Mr Griffiths says that it sees opportunities for ongoing growth. “We have strong bus and rail operations in the UK, where public transport has good prospects as the clear solution to the challenges of increasing road congestion and poor air quality.”
In North America, Stagecoach operates around 2,000 coaches and buses. It employs around 4,500 staff there. The deal with Variant includes the division’s adjusted net debt of US$64.4 million (£51.0 million).
