National Express Group PLC
17 June 2002
17 June 2002
National Express Group PLC
£75 million Canadian school bus acquisition
National Express Group PLC ('the Group') announces that it is acquiring the
Canadian school bus operator, Stock Transportation ('Stock'), for a total
consideration of C$170 million (£74.3 million), payable in cash on completion.
The consideration will be funded from existing bank facilities. The
transaction, which is scheduled to complete in early July 2002, is expected to
be immediately earnings enhancing before the amortisation of goodwill.
Stock is the largest privately owned school bus business in Canada. The
acquisition significantly strengthens the Group's position as the third largest
school bus business in North America and marks its first move into Canada, where
over 75% of the school bus market is outsourced.
Based in Toronto, Ontario, Stock was established in 1958. Stock has more than
2,200 buses with over 80% of its operations in Nova Scotia and Ontario, Canada.
It operates 33 contracts on behalf of school boards and employs 2,610 employees,
of whom 2,400 are drivers and bus attendants. Following acquisition Stock will
retain its own brand.
Unaudited normalised pro-forma results for Stock for the twelve months to 31 May
2002 show EBITDA of C$25.2 million (£11.0 million) on turnover of C$87.0 million
(£38.0 million). Stock's audited results prepared under Canadian GAAP for the
year ended 31 August, 2001 showed normalised EBITDA of C$21.1 million (£9.2
million) and pre exceptional profit before tax of C$7.2 million (£3.1 million)
on turnover of C$78.9 million (£34.5 million). Stock had audited net assets of
C$3.2 million (£1.4 million) as at 31 August 2001 and is being acquired debt
Brian Stock, President, will become Chief Operating Officer of the new Canadian
division of National Express Corporation ('NEC'), the Group's US holding
company, reporting to Larry Durham, NEC's President and Chief Executive Officer.
Barry Stock, Stock's Senior Vice President, will become Senior Vice President,
New Business Development for NEC's school bus division.
The acquisition will increase NEC's school bus fleet by 25% to over 10,500 buses
and extends its service to 20 states in the USA and two provinces in Canada,
with approximately 360,000 students transported each day.
Including its public transit operations, NEC will have annualised turnover of
approximately US$630 million (£427.3 million) following the acquisition,
operating over 13,500 buses and employing over 20,500 people.
Brian Stock said: 'We are extremely excited about this opportunity to leverage
our expertise with the third largest operator in North America. We look forward
to working with Larry and his team to improve further the quality of services
that we provide to the students we serve. By combining resources we can take
significant advantage of the opportunities that exist within the marketplace.'
Larry Durham said: 'Stock has a first class reputation, built on the same values
of safety, integrity and customer responsiveness that NEC maintains. Stock's
highly regarded management team and proven operating processes will strengthen
our competitive advantage. The appointments of Brian and Barry Stock to our
senior management team reflect the considerable skills and knowledge they bring
to the business and I would like to welcome them and their management and
employees to the Group.'
Commenting on the acquisition, Phil White, Chief Executive of National Express
Group said: 'This is our first acquisition in Canada and immediately makes
National Express the second largest operator there. We are particularly pleased
to acquire Stock which has a high reputation for the quality of its management
and operations. This acquisition is a key component of our strategy to increase
our presence in the North American bus market.'
- E N D S -
Notes to Editors
1. National Express Corporation (NEC) is the third largest provider of
student transportation and the second largest provider of public transit and
demand response services in the USA.
2. The North American school bus market comprises approximately 490,000
buses and services over 24 million students each day. Canadian operations
account for at least 40,000 buses and transport 2.5 million students each day.
The Canadian market is highly privatised with over 75% of services run by over
1,400 private sector operators, the vast majority of which operate fewer than 50
buses. Within the Canadian market Stock is the largest privately owned school
3. For further information on the National Express Group, please contact:
For further information, please contact:
William Rollason, Finance Director
Nicola Marsden, Group Communications Director
National Express Group PLC Tel: 020 7529 2000
Larry Durham, Chief Executive
Rachel McDaniel, Director of Public Relations
National Express Corporation Inc Tel: 00 1 512 343 6292
Steve Jacobs/Ben Foster
Financial Dynamics Tel: 020 7831 3113
This information is provided by RNS
The company news service from the London Stock Exchange