Greyhound’s fleet of 1,300 vehicles and 2,400 employees are to move to FlixMobility as FirstGroup becomes a solely UK-based business
FlixMobility, owner of the FlixBus and FlixTrain brands, announced on 21 October that it had acquired long-distance US operator Greyhound Lines from FirstGroup, an acquisition which it said marks another important step in its vision to provide ‘easy-to-use, affordable, and environmentally friendly, travel for consumers across the globe.
Flixmobility said that the purchase will bring together FlixBus’ global technology and shared mobility expertise and Greyhound’s iconic nationwide presence and experience, creating a company that will be better able to serve the needs of coach travellers in the United States, as coach lines which were a lifeline during the pandemic serve as a ‘tremendous driver’ for sustainable growth across the country as it emerges from the Covid-19 crisis. The FlixBus network serves over 2,500 destinations in 36 countries outside the US, with around 400,000 daily connections. Greyhound currently connects approximately 2,400 destinations across North America, carrying nearly 16 million passengers each year.
André Schwämmlein, co-founder and Chief Executive Officer of FlixMobility, said, “Consumers across North America are increasingly seeking affordable, comfortable, smart and sustainable mobility solutions. A compelling offering will draw significantly more travellers away from private cars to shared coach mobility. Together, FlixBus and Greyhound will be better able to meet this increased demand. As our business continues to recover from the effects of the pandemic, we will replicate the success that we have already achieved in 36 countries outside of the US with our innovative and customer centric approach.”
Flixmobility believes that coaches as a sustainable and accessible alternative are now more important than ever due to fluctuations in the cost of gas, the recent escalation of car prices, and climate change concerns, which have combined to increase the interest of many consumers in finding alternatives to individual car usage. The company believes it is operating at the forefront of this global ‘mega-trend,’ and said that the acquisition of the iconic Greyhound business will help the company realise its vision to offer sustainable and affordable travel to everyone.
Jochen Engert, co-founder and Chief Executive Officer of FlixMobility, commented, “The continuous expansion of our services through partnerships and acquisitions has always been an integral part of our growth strategy to build our global presence. The acquisition of Greyhound is a major step forward in the US. The FlixBus and Greyhound teams share a common vision to make smart, affordable and sustainable mobility accessible to all.”
David Martin, Executive Chairman, FirstGroup said: “The sale of Greyhound to FlixMobility is part of our portfolio rationalisation strategy to refocus FirstGroup as a UK public transport leader. The strength of Greyhound is its people, and I would like to thank them for their unwavering commitment to their customers and communities. As part of FlixMobility, I am confident that Greyhound will be well placed to continue to grow and develop their iconic services for many years to come.”
FirstGroup has reached agreement with Neptune Holding, a corporation fully-owned by FlixMobility, to sell Greyhound Lines, including its vehicle fleet, trademarks, and certain other assets and liabilities, for an enterprise value on a debt-free/cash-free basis of around $46m plus unconditional deferred consideration of $32m with an interest rate of 5% per annum.
FirstGroup had previously set out its objective to rationalise the Group’s portfolio of businesses in light of what it called the ‘limited synergies’ between its UK and North American divisions, and the sale of Greyhound follows the sale of the Group’s other North American businesses, First Student and First Transit, to EQT Infrastructure in July 2021. After ongoing uncertainty, the transaction provides clarity for Greyhound’s customers, employees and stakeholders and FirstGroup said it believes that its new owners are well placed to support the continued development of Greyhound going forward.