SeaLink Travel Group has announced it is acquiring major WA based bus operator Go West Tours in a deal that is reported as costing $72.4 million, a move that will add considerably to the diversified transport group, which acquired major bus operator Transit Systems in January last year .
The acquisition gives GoWest an enterprise value of $84.7 million plus an earn-out component of up to $25 million, with expectations the deal will be completed in early July.
“The acquisition of Go West provides SeaLink with a unique opportunity to expand into a new market that is highly complementary to our existing Australian bus transport capabilities,” says SeaLink’s Group chief executive officer Clint Feuerherdt.
“Go West has valuable contract counterparties and delivers an essential service for these clients. The operations of Go West were unaffected by the COVID-19 pandemic and continued at near 100 per cent levels throughout, keeping their communities and worksites connected.”
Founded in the mid 1980s, Go West employs more than 181 personnel and has a fleet of 287 buses across nine depots in Western Australia and has enjoyed strong growth in recent years on the back of the resources boom, winning multi-year contracts with leading mining companies and other regional services such as school bus transfers.
SeaLink has forecast that the purchase will be funded from existing cash reserves and existing undrawn debt facilities with GoWest having earned $46.2 million in revenue in the 12 months to 30 September last year with a strong tender pipeline of new contract opportunities across WA.
“The Go West team has built a high-quality business focused on providing great service whilst maintaining high safety standards for their clients,” Feuerherdt says.
“Our intention is to retain the well-recognised and established Go West brand and continue to work with, and support, Go West’s existing client base.
“We are very excited about the growth opportunities this acquisition provides SeaLink and look forward to welcoming all of Go West’s employees to the Group.”
The Adelaide-headquartered SeaLink Group recorded record revenue of $570.8 million in the December half following the its major acquisition of Australian based global bus operation, Transit Systems Group in January last year, which helped deliver a massive 231.9 per cent rise in net profit after tax to $48.1 million.
It is clear that SeaLink Group is showing no signs of putting on the brakes anytime soon, building on its success last year