ComfortDelGro Corporation said on Wednesday (Dec 21) that it has signed an agreement with Cabcharge Australia Ltd to acquire the remaining 49 per cent stake in ComfortDelGro Cabcharge Pty Ltd (CDC) for A$186 million (about S$196 million).
The acquisition is based on a valuation of 4.6 times CDC's 2015 EBITDA (earnings before interest, tax, depreciation and amortisation) and will be financed by a combination of internal funds and bank borrowings.
The agreement is subject to approval from the Australian Foreign Investment Review Board.
CDC was formed in 2005 following the acquisition of the Westbus Group by ComfortDelGro and Cabcharge. Since then, the company has grown to become one of the largest private bus operators in New South Wales and Victoria, said ComfortDelGro. CDC has a combined fleet of 1,712 buses and employs 2,300 staff.
Said Mr Kua Hong Pak, ComfortDelGro Managing director and group CEO: "The acquisition of the remaining stake in CDC reflects our commitment to the Australian market and our continued confidence in its growth potential. Through a wholly-owned subsidiary, we are better able to seek new opportunities to grow the business."
Subject to regulatory approval, the acquisition is expected to be completed in the first quarter of 2017.
Besides the bus operations in New South Wales and Victoria, ComfortDelGro also operates taxi services in Perth, Western Australia.