Keppel Infrastructure Trust to acquire majority stake in Australian bus business for S$570.6 million
Mia Pei
KEPPEL Infrastructure Trust (KIT) is spending S$570.6 million to acquire a 98.6 per cent stake in Ventura Motors, subject to completion adjustments.
Acquiring a majority stake in the largest bus-service business in the state of Victoria in Australia is expected to support KIT’s overall distribution per unit (DPU) accretion of 3.4 per cent based on the FY2023 DPU, said the manager on Monday (Feb 5).
Upon completion of the proposed acquisition, KIT’s assets under management would increase to about S$8.7 billion, from around S$8.1 billion as at Jan 2.
Kevin Neo, chief executive officer of KIT’s trustee-manager, highlighted that Ventura plays a critical role for commuter bus services in Victoria.
He said: “Providing an essential service, Ventura is a good match for KIT’s portfolio, as it generates stable, recurring and predictable cash flows...
“As the market leader, Ventura is well-placed to support the evolving public transportation needs of the fast-growing population of Melbourne, with a strong commitment to sustainability.”
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The purchaser, KIT’s unit Fawkes Infrastructure Topco, will pay an estimated consideration of A$328.2 million (S$295.3 million) on the completion date, which is within 14 business days after all conditions precedent have been satisfied or waived, or such other date agreed on by the parties.
The estimated consideration is based on Ventura’s enterprise value of A$600 million, after taking into account its cash, debt and working capital, and other expenses.
The total consideration for the proposed acquisition comprises the estimated consideration, S$6 million settled by issuance of shares in Topco on the completion date, as well as the earnings earn-out amounts, if any, of up to A$20 million.
The total acquisition cost stands at S$570.6 million, which includes the estimated consideration of A$328.2 million, as well as Ventura’s existing loans of A$269.3 million on top of other amounts payable. The trust manager noted that it aims to fund the total cost via a combination of internal sources of funds, equity, debt capital market issuances as well as external borrowings.
“The transaction is expected to be completed in Q2 2024, subject to the conditions precedent, including approval from the Australian Foreign Investment Review Board and consent from the head of transport for Victoria,” said the manager.
Andrew Cornwall, managing director of Ventura, will stay on as CEO and retain a minority stake in the business.
Units of KIT closed S$0.005 or 1 per cent lower at S$0.505 on Monday.
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