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ComfortDelGro buys Australian bus operator B&E Blanch for A$28.3m
COMFORTDELGRO Corporation (CDG) is buying Australian bus service operator B&E Blanch Pte Ltd for A$28.3 million (S$27.5 million), the mainboard-listed transport company announced on Tuesday.
The company, known as Blanch's Bus Company and Brunswick Valley Coaches, has a fleet of 48 buses and coaches and manages three depots in New South Wales. It operates two rural and regional bus service contracts to provide dedicated route and school bus services in the area under long-term contracts with Transport for New South Wales.
When completed, the deal will expand CDG's fleet in New South Wales to 1,550 vehicles.
The purchase consideration is approximately 7.6 times Ebitda (earnings before interest, taxes, depreciation and amortisation), and will be financed with a mix of debt and internal funds. Completion is expected by May 31, 2019.
The acquisition is CDG's sixth in Australia in the last 12 months, and its fifth in New South Wales. It follows the purchase of the Buslink Group for A$190.9 million, CDG's largest single investment in Australia so far which provided it with immediate access to the Northern Territory and Queensland and enabled it to grow its existing bus operations in New South Wales and Victoria.
"We have been actively pursuing investment opportunities in Australia and other countries, as we strengthen our foundation for the next phase of growth," said CDG managing director and group CEO Yang Ban Seng.
"We have been operating in Australia for 14 years now and it is a market that we are very familiar with. We are confident of its continued capacity for growth – not just in the cities we currently operate in, but new ones as well. As more opportunities present themselves, we will broaden our footprint Down Under in the months and years ahead."
ComfortDelGro shares closed up 1.15 per cent or three Singapore cents to S$2.64 on Tuesday before the announcement.