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ComfortDelGro unit acquires Melbourne's Tullamarine Bus Lines for A$32.2m
TRANSPORT giant ComfortDelGro Corporation announced on Thursday it will acquire Australian bus company Tullamarine Bus Lines Pty Ltd for A$32.2 million (S$32.68 million). The move takes advantage of Melbourne's new developments and population growth, as well as adds to the group's offerings in the city's north-west metropolitan area.
CDC Victoria, the group's wholly owned subsidiary in the state of Victoria, will undertake the acquisition, which ComfortDelGro said in a media statement is about 9.9 times Tullamarine's earnings before interest, taxes, depreciation and amortisation (Ebitda).
A family-owned business located close to Tullamarine Airport in Melbourne's north-west, Tullamarine Bus Lines is currently under a long-term contract with state government agency Public Transport Victoria to operate seven metropolitan bus routes.
In addition to its bus routes, Tullamarine Bus Lines also operates contracted school services and Cabways, a taxi management firm.
The company's 34 buses will add to CDC Victoria's fleet, taking its total number of buses to 494.
ComfortDelGro said that the acquisition, subject to regulatory approval, will be funded by a combination of debt and internal funds; and is not expected to have any material impact on the group's financials for the current financial year.
ComfortDelGro's managing director and group chief executive Yang Ban Seng said that the acquisition of Tullamarine Bus Lines is a "strategic move" to consolidate the group's operations in north-west Melbourne.
"The area has good population growth with many new developments in the pipeline. The continued growth of Tullamarine Airport has also strengthened demand for public transport services in the area," he said.
Meanwhile, CDC Victoria also highlighted that its five metropolitan bus contracts for Public Transport Victoria have recently been renewed and consolidated into three new contracts which will run for 10 years, subject to performance targets.