<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>S'pore giant buys Aussie bus company
</TR><!-- headline one : end --><TR>$147m purchase will make ComfortDelGro the largest bus operator in Australia </TR><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Christopher Tan, Senior Correspondent
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With the acquisition of the Kefford Group plying Westrans buses, ComfortDelGro will have a fleet of 1,198 buses Down Under. -- PHOTO: COMFORTDELGRO
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<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->TRANSPORT giant ComfortDelGro has made its first major acquisition Down Under, in a move that benefits hugely from the soft Australian dollar.
The Singapore-based group is paying A$149.2 million to buy Victorian bus operator Kefford Group. That works out to S$147.3 million based on an exchange rate of just over 98 cents per A$1.
Barely five months ago, the same deal would have cost ComfortDelGro S$195 million or so.
Kefford is a family-owned transport business that goes back more than 150 years. It has 328 buses, six depots and a 16 per cent share of the bus market in the south-eastern state of Victoria.
The sale was done through a closed tender, and ComfortDelGro, together with its Aussie subsidiary Cabcharge Australia, is believed to have submitted the highest offer among at least four bidders.
The purchase price is about 1.9 times the net asset value of Kefford and 6.4 times its earnings before interest, taxes, depreciation and amortisation.
'It's a reasonable price,' said Ms Lisa Lee, senior analyst at Nomura Singapore. 'It's part of the company's long-term strategy to grow its Australian presence.'
The acquisition comes less than three months after ComfortDelGro ditched plans to start a bus-building business Down Under.
'This (the Kefford deal) is much better than bus-building,' Ms Lee noted.
ComfortDelGro, which has transport businesses in Britain and China, made its foray into Australia in 2005 when it bought New South Wales' Westbus Group.
ComfortDelGro managing director Kua Hong Pak said: 'We now have a strong presence in the two most populous cities in Australia - Sydney and Melbourne - and major regional areas in both states.
'Our ambitions do not end there...we want to become a significant operator in the Australian bus sector.'
The acquisition of Kefford, which is subject to regulatory approvals, will make ComfortDelGro Australia's largest bus operator, with a fleet of 1,198 buses.
For the first nine months of this year, turnover in Australia had increased by 25.7 per cent to $156.9 million. The revenue model for bus companies in Victoria is similar to that in New South Wales: operators are paid a contractual amount.
Close to 90 per cent of Kefford's revenue is derived from government contracts. Thus, observers expect it to benefit directly from the Victorian government's A$10.5 billion plan to improve the public transport system over 10 years.
ComfortDelGro's newest purchase will be financed internally as well as by bank loans.
While analysts have cheered the favourable exchange rate of the acquisition, they reckon the weaker Aussie dollar and pound sterling will weigh down earnings from Australia and Britain - as they had in the third quarter.
This, they point out, will be offset by better earnings from China, as well as plunging oil prices.
The latter will benefit its Singapore operations most because of a public transport fare rise that kicked in last month, lower fuel costs for its buses and higher commuter numbers. [email protected]
</TR><!-- headline one : end --><TR>$147m purchase will make ComfortDelGro the largest bus operator in Australia </TR><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Christopher Tan, Senior Correspondent
</TD></TR><!-- show image if available --><TR vAlign=bottom><TD width=330>
</TD><TD width=10>
With the acquisition of the Kefford Group plying Westrans buses, ComfortDelGro will have a fleet of 1,198 buses Down Under. -- PHOTO: COMFORTDELGRO
</TD></TR></TBODY></TABLE>
<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->TRANSPORT giant ComfortDelGro has made its first major acquisition Down Under, in a move that benefits hugely from the soft Australian dollar.
The Singapore-based group is paying A$149.2 million to buy Victorian bus operator Kefford Group. That works out to S$147.3 million based on an exchange rate of just over 98 cents per A$1.
Barely five months ago, the same deal would have cost ComfortDelGro S$195 million or so.
Kefford is a family-owned transport business that goes back more than 150 years. It has 328 buses, six depots and a 16 per cent share of the bus market in the south-eastern state of Victoria.
The sale was done through a closed tender, and ComfortDelGro, together with its Aussie subsidiary Cabcharge Australia, is believed to have submitted the highest offer among at least four bidders.
The purchase price is about 1.9 times the net asset value of Kefford and 6.4 times its earnings before interest, taxes, depreciation and amortisation.
'It's a reasonable price,' said Ms Lisa Lee, senior analyst at Nomura Singapore. 'It's part of the company's long-term strategy to grow its Australian presence.'
The acquisition comes less than three months after ComfortDelGro ditched plans to start a bus-building business Down Under.
'This (the Kefford deal) is much better than bus-building,' Ms Lee noted.
ComfortDelGro, which has transport businesses in Britain and China, made its foray into Australia in 2005 when it bought New South Wales' Westbus Group.
ComfortDelGro managing director Kua Hong Pak said: 'We now have a strong presence in the two most populous cities in Australia - Sydney and Melbourne - and major regional areas in both states.
'Our ambitions do not end there...we want to become a significant operator in the Australian bus sector.'
The acquisition of Kefford, which is subject to regulatory approvals, will make ComfortDelGro Australia's largest bus operator, with a fleet of 1,198 buses.
For the first nine months of this year, turnover in Australia had increased by 25.7 per cent to $156.9 million. The revenue model for bus companies in Victoria is similar to that in New South Wales: operators are paid a contractual amount.
Close to 90 per cent of Kefford's revenue is derived from government contracts. Thus, observers expect it to benefit directly from the Victorian government's A$10.5 billion plan to improve the public transport system over 10 years.
ComfortDelGro's newest purchase will be financed internally as well as by bank loans.
While analysts have cheered the favourable exchange rate of the acquisition, they reckon the weaker Aussie dollar and pound sterling will weigh down earnings from Australia and Britain - as they had in the third quarter.
This, they point out, will be offset by better earnings from China, as well as plunging oil prices.
The latter will benefit its Singapore operations most because of a public transport fare rise that kicked in last month, lower fuel costs for its buses and higher commuter numbers. [email protected]
