SeaLink to swap rudders for wheels in $635 million acquisition
Written on the 8 October 2019 by Paris Faint
SeaLink (ASX: SLK) is bound for land, steaming towards an acquisition of Australia's largest bus operator Transit Systems Group.
The owner of popular ferry and charter sightseeing services including Sydney's Captain Cook Cruises and the iconic PW Murray River Princess is set to buy Transit Systems for $635 million, reportedly its biggest acquisition to date.
To finance the buyout the company will undertake a $154 million equity raising, adding to an upfront consideration of $269 million in SeaLink scrip plus $118 in million cash and $211 million in debt facilities.
CEO and managing director Jeff Ellison says the acquisition will make SeaLink a diverse business.
"After many months of due diligence, I am delighted to have reached an agreement to acquire Transit Systems Group which has steadily grown over 24 years to become a leading provider of metropolitan public bus services both in Australia and internationally," says Ellison.
"This acquisition diversifies SeaLink's end-markets towards long term bus contracts with government counterparties who are looking for reliable public transport solutions.
"Today represents the start of SeaLink's next phase of growth as an integrated multi-modal passenger service provider."
As the family-owned company Transit Systems changes hands, so too does its leadership.
Jeff Ellison announced his intention to retire from the top job in August 2018 and today his replacement has been revealed as Transit Systems CEO Clint Feuerherdt will follow his company to fill Ellison's shoes.
"The board of directors of SeaLink believe that Clint is uniquely positioned to lead the combined SeaLink and Transit Systems Group business," says SeaLink chairman Andrew McEvoy.
"Clint has worked with Transit Systems Group for 10 years and throughout this time has acquired significant experience in managing a large passenger transport business delivering reliable and safe services to large-scale government contracts."
Following his retirement as CEO and managing director, Ellison will remain on the SeaLink board as a non-executive director.
SLK shares are trading flat at $3.91 as of 9:53am AEST.Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
Business News Australia
Author: Paris Faint