ComfortDelgro – BT
ComfortDelGro buys Aussie bus company
It will pay A$149.2m for Kefford Group, fourth largest bus operator in Victoria
ComfortDelGro will pay A$149.2 million (S$143.6 million) for the fourth largest bus operator in Victoria, Australia as the group moves steadily towards its goal of becoming a ‘significant operator’ in the Australian bus sector
The land transport giant acquired the Kefford Group through its 51 per cent-owned subsidiary ComfortDelGro Cabcharge Pty Ltd (CDC) after a four-month closed tender that attracted Australian and international operators.
Kefford is one of the oldest bus operators in Victoria state. It has a 16 per cent market share with a fleet of 328 buses and six depots.
It operates 66 route services under long-term government contracts in four main regions under brands such as Westrans and Eastrans in Melbourne, Benders Busways Lines in Geelong and Davis Bus Services in Ballarat.
ComfortDelGro said as the largest provider of bus routes in Melbourne’s western suburbs, Kefford stands to benefit from the Victorian government’s announcement of a A$10.5 billion plan to improve the public transport system over 10 years.
‘Kefford gives us a firm foothold in Victoria and together with our operations in New South Wales we now have a strong presence in the two most populous cities in Australia – Sydney and Melbourne – and major regional areas in both states,’ said ComfortDelGro managing director and group CEO Kua Hong Pak.
In terms of material impact, ComfortDelGro’s group corporate communications officer Tammy Tan said: ‘Kefford is a profitable business and should be able to contribute to the group’s bottom line from the word go.’
The acquisition of Kefford, which is subject to regulatory approvals, will cement CDC’s position as the largest private bus operator in Australia with a fleet of 1,198 buses.
For the first nine months of 2008, ComfortDelGro’s turnover in Australia increased 25.7 per cent to $156.9 million.
In a sign that there could be more Australian purchases to come, Mr Kua said: ‘Our intentions are clear – we want to become a significant operator in the Australian bus sector.’
When asked whether ComfortDelGro would pick up the pace of its acquisitions because of the falling Australian dollar, Ms Tan replied: ‘Certainly the weaker Aussie dollar has worked to our benefit where this acquisition is concerned.’
But she emphasised that ComfortDelGro makes investments not just based on exchange rate movements.
‘Rather, we base them on the strength of the investment opportunities themselves,’ she said.
Overseas ventures now account for 42 per cent of group turnover, which for the third quarter ended Sept 30 was up 5.2 per cent to $803.5 million.
The group aims to derive 70 per cent of its turnover from overseas within the next five to seven years.