Stagecoach strikes £20m deal to snap up east London buses
It said the move is ‘a good strategic fit’ alongside Stagecoach’s existing London operations.
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Stagecoach has sealed a £20 million deal to buy Kelsian Group’s east London bus operations.
The travel business said it has “entered into binding agreements” to purchase the operations, which also include a deport at Lea Interchange, for an initial £10 million followed by £1 million each year for 10 years after the move is completed.
Kelsian’s east London operation operates 11 contracts on behalf of Transport for London (TfL), using a fleet of around 150 buses, with an annual turnover of around £38 million.
It said the move is “a good strategic fit” alongside Stagecoach’s existing London operations.
Stagecoach added that the new depot will also provide the business with a platform to bid for new contracts in the area.
The group said it expects its net debt to increase by around £20 million upon completion of the move.
Martin Griffiths, Stagecoach chief executive, said: “We have an extensive track record of operating high-quality and profitable bus services on behalf of Transport for London.
“This targeted acquisition provides operational and margin improvement opportunities that we have successfully delivered at our other London bus depots.
“We look forward to working with TfL to deliver even better bus links to local communities in east London and also helping support the Mayor’s drive to deliver a net zero transport system.”
It comes as Stagecoach looks set for a £595 million takeover by German investment fund DWS.
The travel company’s board backed the move in favour of a rival merger deal from coach operator National Express.
Last week, National Express confirmed it will not raise its bid for Stagecoach and maintained it believed the move is “superior” to DWS’s offer.