Mobico Completes North America School Bus Sale
Why we think this is good
The sale of Mobico's North America School Bus business for an enterprise value of up to $608m (£457m) is a positive development for the company. The net upfront proceeds of $364m (£273m) will be used to reduce the Group's debt, improving its financial position. The transaction has been completed following regulatory approval, and the company expects its FY 25 covenant gearing to be reduced to approximately 2.5x. This should provide the company with ample liquidity and financial flexibility to focus on its core operations.
Key Points
- Net upfront proceeds from the sale of $364m (£273m)
- FY 25 covenant gearing expected to be reduced to approximately 2.5x
- Ample liquidity with no significant debt maturities for over 24 months
- No change to FY 25 Adjusted Operating Profit guidance
Summary
Mobico Group PLC has completed the sale of its North America School Bus business to I Squared Capital for an enterprise value of up to $608 million (£457 million). The net upfront proceeds received on closing were $364 million (£273 million), which will be used to reduce the Group's debt. In addition, there is a $70 million earn-out arrangement contingent on the business achieving certain performance targets.
The sale provides Mobico with ample liquidity, with no significant debt maturities due until the second half of 2027. The increased financial flexibility will enable the Group to focus on its objective to de-leverage. Excluding any contribution from the School Bus business, Mobico continues to expect FY 25 Adjusted Operating Profit to be in the range £180 million - £195 million.