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- Infrastructure investors Infratil has officially sold its NZ Bus business to Next Capital
- The final consideration for the business is between $125 – $145 million
- Infratil’s share price is up 0.47 per cent today, currently sitting at $4.32 apiece
Infrastructure investors Infratil has officially sold its NZ Bus business to private equity firm Next Capital.
In February last year, following a strategic review of the business, Infratil decided to sell NZ Bus.
Its contracts in Auckland were valued at $1 billion, with an average nine year term life and its Wellington operations were valued at $323 million, with almost an 11 year average contract life.
By December, Next Capital emerged as the buyer, however, a number of approvals were required, including by the Overseas Investment Office, which has now been received.
On agreeing to buy last year, Next Capital partners John White and James Murphy explained having a holding in the New Zealand bus sector is important, due to the nations reliance on busses as a mode of transport.
“Next Capital considers that the bus industry provides to core public transport function in NZ’s dynamic metropolitan environments and is excited about its re-entry in the important sector,” they said.
The final consideration for the business is between $125 – $145 million, after the company was valued between $145 – $165 million. Infratil attributes the difference in price to a tough eight months of operation.
So far, $93 million has been paid in cash, the remaining figure is repayable over a 5.5 year period.
Chairman of NZ Bus Kevin Baker said: “The sale concludes a 14-year investment period for Infratil in public transport and enables it to focus on its other core investment sectors.”
Kevin added, NZ Bus will have the opportunity to grow its business under new ownership.
Infratil’s share price is up 0.47 per cent today, currently sitting at $4.32 apiece, as of AEST 12:05 pm.
