Stagecoach has agreed to purchase the east London bus operations of Tower Transit parent Kelsian Group, including its Lea Interchange depot. The deal is worth £20m. Half will be payable upon completion, with a further £1m due per annum for 10 years commencing on the first anniversary, subject to certain conditions.
Lea Interchange operates 11 routes and around 150 buses on behalf of Transport for London (TfL). Its annual turnover is approximately £38m.
Stagecoach says that Lea Interchange “is a good strategic fit” with its existing London operations. The group believes that “there are opportunities to improve operational performance and grow contract margins as routes are retendered.” It also notes that Lea Interchange will act as a platform to bid for new contracts in the short and medium term.
Says Chief Executive Martin Griffiths: “We have an extensive track record of operating high-quality and profitable bus services on behalf of TfL. This targeted acquisition provides operational and margin improvement opportunities that we have successfully delivered at other London bus depots.”
Lea Interchange did not form part of a joint venture established in 2021 by Tower Transit and RATP Dev UK, which for the former captured only its Westbourne Park depot in west London. At that time, Tower Transit’s parent – then known as Sealink Travel Group – said it was analysing options for the future of Lea Interchange, having described the London bus market as “challenging.”
Lea Interchange is a former First London depot that was purchased by Tower Transit in 2013. The current O-Licence in Tower Transit Operations’ name permits the operation of 250 buses from the site.
