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Arriva develops its growing presence in Madrid
3 July 2008
Leading European passenger transport group Arriva plc today significantly increased its position in the growing Madrid transport market, with the acquisition of Empresa de Blas y Cia S.L. (De Blas) and its subsidiaries and investments for Euro 99.25 million (£78.6 million). 80 per cent (Euro 79.4 million) was paid in cash drawn on Arriva’s existing resources at closing and the balance (Euro 19.85 million) has been placed on deposit as security for any claims against the sellers, but is otherwise payable over the next 5 years*.
De Blas, owned by the Gomez and De Blas families, is one of the largest privately owned contractors to the Madrid transport authority. With 222 buses and 679 employees, it operates 34 inter-urban routes into and around the city. Substantial depot facilities to the south-west of Madrid provide significant scope for further expansion.
In 2007, its revenue was Euro 48.8 million (£38.6 million), and profit before tax was Euro 3.5 million (£2.8 million). Gross assets at 31 December 2007 were Euro 34.2 million (£27.1 million), and net assets were Euro 11.4 million (£9.0 million) including net debt of Euro 15.3 million (£12.1 million). The acquisition is expected to be earnings enhancing before goodwill impairment, intangible asset amortisation and exceptional items.
The wholly owned subsidiaries of De Blas are Greisi S.L. and Servicios Integrales Bus & Truck S.A., which provide servicing and maintenance functions for the De Blas operations and third parties. De Blas also has a 30 per cent stake in Intercambiador de Transportes Principie Pio, a newly-constructed transport hub for buses, metro services and overland trains in the south-west of central Madrid, which started operating in May 2007, with a 33-year concession, and passenger numbers estimated at 20 million in its first full year.
David Martin, chief executive of Arriva plc, said: "This is an important step forward in positioning Arriva for the development of one of Europe’s most exciting city markets for passenger transport. Madrid’s rapidly growing population provides a backdrop of strong demand, and the transport authority’s significant investments in services and infrastructure are helping to create the potential for world-class public transport in and around the city.
"De Blas is an established, professionally-managed business with a young fleet. Building on Arriva’s existing presence in Madrid, it gives us a strong foundation for long-term growth, enhancing Arriva’s ability to flourish in this thriving market. Long concessions give considerable visibility into earnings in the medium term, and the business has great potential. We look forward to working with the management team at De Blas to develop and grow our operations further, and benefit from the expanding transport market in the city.”
*5 per cent of the purchase price becomes payable in the first and second years and approximately 3 per cent per annum for each of the remaining three years.
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Notes to Editors:
Arriva will host an audio conference for analysts and investors today at 9am London time. Please contact Tulchan Communications (020 7353 4200) for information.
Arriva is one of the largest transport services organisations in Europe, with operations in 10 countries: the Czech Republic, Denmark, Germany, Italy, the Netherlands, Poland, Portugal, Spain, Sweden and the United Kingdom. With some 40,000 employees, including share of associate companies, Arriva provides more than one billion passenger journeys every year through an extensive range of public transport services, including buses, trains, commuter coaches, airside transport and water buses. In the UK, the group is also engaged in bus and coach distribution.
Arriva’s existing operations in Madrid include more than 100 employees operating 42 buses following the acquisitions of its Esfera and Fray Escoba businesses in 2007. Elsewhere in Spain, Arriva operates bus services in Galicia (Arriva Noroeste), Mallorca (Autocares Mallorca and Bus Nord).
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