Group to refocus on UK
Stagecoach sells North America business for $271.4m
The deal includes $207m in cash and $64.4m in debt, with the adjustment for $20m of dividends paid in November. It is expected to close by 27 April 2019.
Stagecoach said it will use the cash proceeds to reduce its consolidated net debt and refocus its portfolio on the UK.
The North America Division, based in Paramus, New Jersey provides intercity bus service under the brands Coach USA and Coach Canada. It also operates Megabus intercity services and routes serving Disney resorts. The company has roughly 4,500 employees and more than 2,000 buses and coaches.
The company indicated this month that it was in talks to sell the division after struggling with the competition.
In a statement issued overnight, Martin Griffiths, Stagecoach chief executive (pictured), said: “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.com brand.
“We have a great team of people who have ensured we have played a leading role in the development of public transportation in the United States and Canada.
“The sale of our North American operations will allow management to focus more closely on the significant opportunities for growth in the UK. 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.”
Variant is an affiliate of Century City and in a statement its managing partner Farhaad D Wadia said: “Coach USA has a stellar reputation for delivering safe, reliable travel throughout North America.
“We look forward to partnering with the business’ management team to continue driving Coach’s growth under Variant’s ownership.”
Toronto-based RBC Capital Markets acted as financial adviser to Stagecoach.