The bus industry has been taken by surprise with the announcement that listed tourism and transport company SeaLink TravelGroup will purchase Australia’s largest private operator of metropolitan public bus services, Transit Systems Group.

The purchase price for the deal incorporates an enterprise value of A$635 million plus an earn-out component of up to A$63million.

The joint statement about the deal says the acquisition will ‘create Australia’s leading integrated land and marinepassenger transport business with enhanced scale and capabilities to competitively deliver services under government contracts’.

Once the sale has been completed, the combined group it is claimed will have more than 8,000 employees and operate more than 3,200 buses and 78 ferries in NSW, Victoria, Queensland, South Australia, Tasmania, the Northern Territory,Western Australia, London and Singapore. The deal is the largest in SeaLink’s history and is expected to be finalised by early2020.

As a result of the deal, Transit Systems Group Chief Executive Officer, Mr Clint Feuerherdt will replace the retiringSeaLink Chief Executive Officer, Mr Jeff Ellison.

Transit Systems is Australia’s only multi-national public transport business, with metropolitan bus contracts in five states, aswell as London and Singapore.

SeaLink is an Australian Securities Exchange (ASX) listed company with a market capitalisation of approximately

$375 million. This is expected to grow following SeaLink’s equity raising announced today on the Australian

Securities Exchange and the completion of the acquisition.

The acquisition is being funded through a combination of cash and a new share issue to the Transit Systems Groupvendors, to be approved by SeaLink shareholders. Following completion, the Transit Systems Group vendors will becomesubstantial shareholders in SeaLink.

SeaLink’s current Chief Executive Officer, Jeff Ellison said, “the announcement today represents the start of

SeaLink’s next phase of growth as an integrated multi-modal passenger services provider.”

“It will be transformational for us and provides us with the opportunity for significant international expansion usingestablished businesses in Singapore and London.

“This has already opened the door for us to tender for new ferry operations in Singapore and London.”

Mr Feuerherdt said both SeaLink and Transit Systems Group had developed market leading positions in their respectivesectors.

“SeaLink Travel Group and Transit Systems Group have a similar history, with a shared vision to create and deliver world-class transport solutions to passengers,” he said.

“The new arrangement brings together the nation’s best tourism transport company with a globally recognised publictransport company, to deliver comprehensive and integrated network planning solutions with extensive, and unparalleledlocal network knowledge.

“I see significant opportunities for the combined group to target integrated multi-modal passenger transport

contracts across the public and private sectors.”

Mr Ellison will remain in an executive position until the acquisition is finalised and will then stay on as a non- executivedirector