Stagecoach Group plc completed the sale of its school bus operations in the US state of Wisconsin (Wisconsin School Bus) to Student Transportation, Inc. on November 15.
Part of Wisconsin School Bus will be held in trust, pending approval of the sale by the Surface Transportation Board.
Wisconsin School Bus primarily operates school bus services under contract to school boards in the US state of Wisconsin. The business has been part of Stagecoach since 1999. Although the business has performed well, Stagecoach’s share of the US school bus market is relatively small and it said the sale enables it to focus its management and capital on less regulated North American operations, including the fast growing megabus.com business.
The consideration for the sale equated to an enterprise value of $47m, of which $46.75m has been settled in cash and the balance of $250,000 is payable in six months’ time. The sales proceeds will initially be applied to reduce Stagecoach’s consolidated net debt.
The gross assets of Wisconsin School Bus as at April 30, 2011 were $21.8m. Prior to the sale Stagecoach was forecasting revenue of $36.4m and operating profit of $4.0m for the year ending April 30, 2012.
The general manager of Wisconsin School Bus and the rest of its management team transferred with the business.