FirstGroup has completed its exit from the North American passenger transport market with the sale of the Greyhound business to FlixMobility, parent of the FlixBus brand.
The deal will complete immediately. It will see an initial payment of US$140m with a further US$32m to be paid in instalments over 18 months. FirstGroup will initially retain some Greyhound properties that it will lease back to the FlixMobility-owned business, but it expects to sell those over the next three to five years. The Group also retains “certain legacy Greyhound net liabilities.”
FirstGroup notes that the sale completes “its stated strategy to focus on its leading UK public transport business.” It follows the disposal of the First Student and First Transit subsidiaries to EQT Infrastructure for US£3.3bn, which completed in July, and the closure of the Greyhound Canada business two months prior to that.
FirstGroup Executive Chairman David Martin says: “This transaction realises an appropriate value for Greyhound’s operations and ensures that Greyhound’s legacy liabilities are suitable managed.
“Today’s agreement regarding Greyhound’s future completes the Group’s portfolio rationalisation strategy which has refocused FirstGroup on its leading UK public transport business with a strong platform to create sustainable value going forward.”
Adds FlixMobility Founder and CEO Jochen Engert: “The continuous expansion of our network through partnerships and acquisitions has always been an integral part of our growth strategy to build our global presence.
“This acquisition of Greyhound is a major step forward and strengthens FlixBus’s leading position in the US. The FlixBus and Greyhound teams share a common vision to make smart, affordable and sustainable mobility accessible for all.”
The Munich-headquartered business completed a US$650m funding round in June that it said “would lead to future global expansion in new and existing markets.” Existing FlixBus services in North America are operated under contract by operator partners.
