Firstgroup's Bold Return to London's Bus Market with £90m RATP Acquisition

Deal News | Dec 10, 2024 | EIN

Firstgroup's Bold Return to London's Bus Market with £90m RATP Acquisition

Firstgroup, a prominent transport company listed in London, has announced its re-entry into the city's bus market with the acquisition of RATP London for £90 million. RATP London, a significant player with a 12% market share in the city, will enhance Firstgroup's earnings and expand its portfolio. This strategic acquisition will allow Firstgroup to own 10 depots and a fleet of approximately 1,000 buses, significant portions of which are electric. The deal awaits approval from the French government and Transport for London. Following this acquisition, Firstgroup anticipates an annual revenue increase between £300 million to £350 million over five years. The acquisition will be partially funded with £45 million in cash reserves. Firstgroup recently also acquired Grand Union Trains, demonstrating a broader strategy to strengthen its position in the UK transport sector.

Sectors

  • Public Transport
  • Electric Vehicles
  • Infrastructure

Geography

  • United Kingdom – Firstgroup is a UK based company and the acquisition is focused within the UK transport sector.
  • France – RATP Group, the seller, is a French state-backed company, and the transaction involves consent from the French government.

Industry

  • Public Transport – The article focuses on Firstgroup's acquisition of RATP London, showcasing significant activity within the public transport sector.
  • Electric Vehicles – The mention of electric buses as part of the fleet being acquired reflects trends in the adoption of electric vehicles within the transportation service industry.
  • Infrastructure – Involves the acquisition of physical assets such as depots and buses, which fall under infrastructure operations in public services.

Financials

  • £90 million – Acquisition deal price for RATP London.
  • £45 million – Cash from reserves to finance the acquisition.
  • £300 million to £350 million – Expected annual revenue post-acquisition over the next five years.
  • 6% to 7% – Projected operating margins post-acquisition of RATP London.

Participants

NameRoleTypeDescription
FirstgroupAcquirerCompanyA leading transport operator in the UK, involved in rail and bus services.
RATP GroupSellerCompanyFrench-state backed provider of public transport services, owner of RATP London.
London Stock ExchangeMarketCompanyThe location where Firstgroup is listed and its trades occur.
Transport for London (TfL)RegulatoryGovernmentTfL oversees the majority of the London private operators and must approve the transaction.