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ComfortDelGro buys out Cabcharge
COMFORTDELGRO Corp said before Wednesday trading hours that it has entered into an agreement with Cabcharge Australia Ltd to acquire the remaining 49 per cent stake in ComfortDelGro Cabcharge Pty Ltd (CDC) for A$186 million (S$196 million).
The acquisition of the shares from Cabcharge is based on a valuation of 4.6 times 2015 EBITDA (earnings before interest, tax, depreciation and amortisation) of CDC and will be financed by a combination of internal funds and bank borrowings.
The agreement is subject to approval from the Australian Foreign Investment Review Board.
CDC was formed in 2005 following the acquisition of the Westbus Group by ComfortDelGro and Cabcharge. Since then, CDC has grown to become one of the largest private bus operators in New South Wales and Victoria, operating contract scheduled bus, school bus, private contract and charter bus services. It has a combined fleet of 1,712 buses and a total staff strength of about 2,300.
Kua Hong Pak, ComfortDelGro managing director and group CEO, said: "The acquisition of the remaining stake in CDC reflects our commitment to the Australian market and our continued confidence in its growth potential. Through a wholly-owned subsidiary, we are better able to seek new opportunities to grow the business."