(Alliance News) - Stagecoach Group PLC on Friday said its subsidiary, Stagecoach Bus Holdings Ltd, signed binding agreements to buy east London bus operations from Kelsian Group.
The Perth, Scotland-based transport provider - itself set to be acquired - said the deal for Lea Interchange depot would be for a total of GBP20 million.
Stagecoach explained that upon completion, there would be an initial payment of GBP10 million, with a further GBP1 million every year for ten years.
Lea Interchange, located close to Stratford, operates 11 contracts on behalf of Transport of London, with annual revenue of around GBP38 million.
Stagecoach said the deal would be a good strategic fit with the company's existing operations in east and south-east London.
Stagecoach Chief Executive Martin Griffiths said: "We have an extensive track-record of operating high-quality and profitable bus services on behalf of Transport for London.
"This targeted acquisition provides operational and margin improvement opportunities that we have successfully delivered at our other London bus depots."
On Thursday, Stagecoach said its shares are to be cancelled by June 27. Earlier in May, Pan-European Infrastructure III SCSp, an infrastructure fund managed by DWS Infrastructure, said its GBP594.9 million offer for Stagecoach became unconditional.
Stagecoach shares were up 0.1% at 104.76 pence each on Friday morning in London. The DWS cash offer is for 105p.
By Xindi Wei; xindiwei@alliancenews.com
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