LONDON (dpa-AFX) - Stagecoach Group (SGC.L) said that it reached an agreement to sell its North America Division to an affiliate of Variant Equity Advisors LLC, for an estimated enterprise valuation of US$271.4 million.
The consideration includes a Deferred Payment Instrument of US$65.0 million, with the balance of the consideration being payable in cash on completion of the Disposal. The amounts that Scusi receives under the Deferred Payment Instrument might be affected by the future performance or subsequent sale of the North America business.
The company noted that the cash proceeds will be used to reduce Stagecoach's consolidated net debt. The Disposal is expected to complete by the end of the current financial year to 27 April 2019.
Stagecoach's North America Division operates bus and coach services. It provides megabus.com inter-city coach services, commuter services, airport transportation, sightseeing tours, charters and contract services across North America. It has around 4,500 employees and more than 2,000 buses and coaches.
For the year to 27 October 2018, Stagecoach reported revenue of US$619.4 million and operating profit of US$21.7 million for the North America Division.
The Stagecoach Board believes that the Disposal represents an opportunity to realise an attractive valuation for the business whilst refocusing Stagecoach's portfolio on the UK.
The management of the North America Division are expected to remain with that business following the Disposal, while Stagecoach Group's management will principally focus on its UK bus and rail operations, and growth opportunities in the UK.
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