Sale of Coach USA regions
June 06 2003 - 3:02AM
UK Regulatory
RNS Number:0050M
Stagecoach Group PLC
06 June 2003
6 June 2003
Stagecoach Group agrees terms for the sale of the West and South Central regions
of Coach USA
Stagecoach Group plc is pleased to announce that it has agreed terms for the
sale of the South Central and West Regions of Coach USA to a newly formed
affiliate of Kohlberg & Co., LLC.
Completion of the transaction, which is subject to regulatory approval, final
confirmation of financing and normal closing conditions, will mean Stagecoach
Group has achieved approximately two-thirds of its planned Coach USA sales
programme.
The gross consideration for the latest sale is US$155 million, to be satisfied
by cash of US$128.5 million and an interest-bearing loan note receivable of
US$26.5 million repayable no later than 63 months from date of close.
Coach USA's West region operates in California, Colorado, Nevada, Arizona,
Wyoming and North Dakota, running 1,153 vehicles and employing 2,200 people. The
South Central region encompasses coach operations in Texas, Tennessee, Arkansas
and Louisiana, running some 400 vehicles and employing more than 800 people. A
total of 18 businesses are included in the sale.
The consideration is broadly in line with the expected book value of the net
assets at completion and, accordingly, the transaction will not result in a
material gain or loss on disposal in the consolidated accounts of Stagecoach
Group plc. The cash proceeds will initially be used to reduce the Group's
outstanding net debt. The disposal will not have a significant impact on the
Group's annual earnings per share.
The unaudited results of the West and South Central regions to be included in
Stagecoach Group's consolidated results for the year ended 30 April 2003 are
estimated to be a turnover of US$215.9m and an operating profit before goodwill
amortisation of US$14.6m.
Stagecoach Group announced in December 2002 a 12 to 18-month strategy to
restructure Coach USA and identified a number of businesses that it intended to
sell. The sale of the Transit and New England regions have already been
announced, along with the disposal of some small taxi operations in Kansas City,
Long Island and Indianapolis.
The Group intends to continue to pursue opportunities for the disposal of the
South East and Canada regions as well as our remaining taxi businesses.
Consistent with this strategy, the Group will continue to reduce overheads in
line with the business restructuring and sales programme.
Brian Souter, Stagecoach Chief Executive, said: "The disposal of the West and
South Central regions of Coach USA will be a significant step forward in our
restructuring of our North American business.
"We have now completed or agreed terms for approximately two-thirds of the sales
programme at Coach USA and I am pleased with the excellent progress we have made
to date. We are well on track to complete our restructuring of Coach USA within
the timescale we set out six months ago."
ENDS
Enquiries to:
Martin Griffiths, Group Finance Director, Stagecoach Group, 01738 642015
Steven Stewart, Corporate Communications, Stagecoach Group, 01738 442111 or
07764 774680
John Kiely, Smithfield Financial, 020 7360 4900
NOTES TO EDITORS
*Stagecoach Group is one of the world's largest transportation groups,
with operations in the UK, the USA, Canada, Hong Kong, mainland China and
New Zealand.
*Founded in 1987, Kohlberg & Co., LLC is a private merchant banking firm
with offices in New York and California. Through its affiliates, Kohlberg &
Co., LLC has completed more than 75 acquisitions and recapitalization
transactions in a variety of industries.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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