Infratil to help finance sale of NZ Bus to private equity for up to $240M
By Paul McBeth
Dec. 24 (BusinessDesk) - Infratil has agreed to sell its NZ Bus unit to Next Capital for up to $240 million, but will
help the Australian private equity firm pay for it.
Announced after the New Zealand market had closed, Infratil said it's reached a conditional sale with Next Capital,
which sold Go Bus to Ngai Tahu Holdings and Tainui Group Holdings four years ago. The New Zealand firm expects to
receive between $218 million and $240 million from the sale, with the final proceeds adjusted for working capital,
capital spending, net debt and an earnout.
Infratil will also provide vendor finance of between $20 million and $30 million repayable over five and a half years.
The deal needs counterparty consents, Overseas Investment Office approval, and the vendor loan to be fully documented.
"The conditional sale agreement enables NZ Bus to continue to grow its business and people under new ownership and
allows Infratil to focus its investments on its established platforms and targeting renewable energy, retirement
services, and growth in data and connectivity," Morrison & Co executive and NZ Bus chair Kevin Baker said in a statement to the ASX.
Infratil has been reviewing its 13-year ownership of NZ Bus since February after negotiations with Auckland and
Wellington councils ended in smaller contracts with the local authorities. The 20 Auckland contracts were valued at $1
billion with an average tenure of nine years, while the five Wellington contracts were worth $323 million, with an
average 10.8-year term.
Next Capital briefly owned New Zealand's Go Bus business between 2012 and 2014 before selling it to the nation's two
biggest iwi corporate entities for a reported $170 million.
"Next Capital considers the bus industry provides the core public service transport function in New Zealand's dynamic
metropolitan environments and is excited about its re-entry into this important sector, following prior successful
investments in GoBus in NZ and Forest Coach Lines in Australia," partners John White and James Murphy said.
Infratil's shares were unchanged at A$3.60 on the ASX. They rose 0.1 percent on the NZX to $3.58, before the
announcement was made.
(BusinessDesk)