SeaLink Travel Group Limited has entered into binding agreements to acquire 100% of Transit Systems Pty Ltd, Tower Transit Group Ltd and their broader group of entities, Australia’s largest private operator of metropolitan public bus services and an established international bus operator in London and Singapore, for an enterprise value of AUD635 million (US$427 million) plus an earn-out component of up to AUD63 million (US$42 million).

To partly fund the Acquisition, SeaLink is undertaking a fully underwritten AUD65 million (US$43.7 million) placement to new and existing institutional shareholders and a fully underwritten AUD89 million (US$60 million) pro-rata, accelerated, non-renounceable entitlement offer to raise a total of A$154 million (US$104 million). The balance of the consideration payable for the Acquisition will be funded by the issue of AUD269 million (US$181 million) of SeaLink scrip to the vendors of the Transit System Group, and by drawing down on new multi-tranche debt and revolving credit facilities which will largely replace existing SeaLink and Transit Systems Group debt facilities. As a result of the scrip issuance, certain vendors of Transit Systems Group will become substantial holders of SeaLink and are expected to hold in aggregate ~33.4% of SeaLink shares on issue post-Acquisition (subject to a staggered two-year escrow arrangement from the date of issuance).

The Acquisition is subject to SeaLink shareholder approval of the scrip consideration and the provision of financial assistance by the Transit Systems Group pursuant to the new multi-tranche debt and revolving credit facilities, FIRB approval for Transit Systems Group vendors to receive SeaLink scrip consideration, no material adverse change in respect of the Transit Systems Group or the SeaLink Group, change of control consents for bus and other contracts, as well as other customary conditions.