Infratil has completed the sale of its NZ Bus business to funds controlled by Next Capital.
Infratil began a review of its investment in NZ Bus in February 2018, and a conditional sale agreement was executed with Next Capital in December 2018.
The sale agreement was conditional upon counterparty consents to the change of control and Overseas Investment Office approval which have now been received.
The final consideration after post-completion adjustments for working capital, capital expenditure, and an earnout mechanism is expected to be between $125 million to 145 million, and values 100% of the business at between $145 million to $165 million.
This reflects the “challenging environment the business has operated in over the last eight months and Infratil’s mid-point estimate of the earn-out component outcome”.
Upfront cash proceeds of approximately $93 million have been received. The balance will be paid in cash and a vendor loan of up to $20 million repayable within five-and-a-half years of completion.
“The sale concludes a 14-year investment period for Infratil in public transport and enables it to focus on its other core investment sectors and NZ Bus the opportunity to continue to grow its business and people under new ownership,” NZ Bus chairman Kevin Baker says.
“NZ Bus staff are highly capable, valued and committed to high standards of delivery and we wish NZ Bus staff, its other stakeholders and Next Capital every success in the future.”
Next Capital partners John White and James Murphy said in a joint statement they look forward “to invest in the growth of the business in coming years”.
