Rotala acquires Birmingham’s Central Buses
Rotala has acquired Birmingham-based Central Buses.
The company has taken the business’s entire bus business, bus brand and 31-strong fleet for a total cash consideration of £1.95m from CEN Group, the operation’s parent company. There will be no changes to the services or fleet. The current MD of Central Buses is Geoff Cross, who will not be re-employed by Rotala. Every other employee is entitled to TUPE transfer and Rotala is not planning to make any redundancies. The fleet is to be rebranded into the business’s Diamond Bus livery in time. The buy-out was funded from Rotala’s existing debt facilities.
Rotala estimates that the Central Buses business has annual revenues of approximately £2.8m and that its vehicle fleet has a fair value of approximately £1.5m. The acquisition is expected to generate about £0.45m of positive goodwill on consolidation. No additional overheads are expected to be required as a result of the takeover. The Directors believe that, following the completion of the deal, the company will benefit from an additional EBITDA contribution of approximately £0.45m in a full year. Rotala will not assume any other assets or liabilities of any materiality on acquisition.
Rotala describes Central Buses as a well-established operator of commercial and contracted bus services in the northern part of the West Midlands. This business, with its staff, will be integrated into the existing depot infrastructure, which the operator already possesses in the region. The acquisition will extend the Group’s network of bus services in the northern part of Birmingham, particularly in the Perry Barr area. Completion of the acquisition is expected to occur in late February.
The announcement of the take-over came as Rotala reported its trading for the financial year 2017 was in line with market expectations. The deal also follows three previous acquisitions in the last 12 months, including that of Hansons (Wordsley) Ltd, an independent bus company operating in Stourbridge, in July. In September the Group acquired Go Goodwins’ bus business in Eccles, Manchester and at the end of its financial year the Group acquired the Hotel Hoppa business in and around Heathrow airport. The takeovers were made in accordance with the Group’s declared strategy of acquisitive growth. It claims to have considerably strengthened its business in the geographical locations in which these acquisitions occurred. Following the four take-overs which have been made since July 2017, the Group’s turnover this financial year is expected to grow considerably.