Rotala PLC Acquisition
29 April 2022 - 04:02PM
RNS Non-Regulatory
TIDMROL
Rotala PLC
29 April 2022
RNS Reach
29 April 2022
Rotala Plc
("Rotala" or the "Company" or the "Group")
Acquisition of established bus operator in Warwickshire and the
West Midlands
Rotala plc (AIM:ROL) is pleased to announce the acquisition from
Johnsons (Henley) Limited of its entire bus business and 20-strong
fleet, for a cash consideration of GBP936,000 payable on completion
(the "Acquisition"). The business being acquired is a
well-established operator of commercial and contracted bus services
in Warwickshire and the southern West Midlands. The Acquisition is
expected to be earnings enhancing from completion.
Rotala estimates that the assets being acquired have annual
revenues of approximately GBP3.5 million and that the vehicle fleet
has a fair value which approximates to the cash consideration being
paid. Rotala will not assume any other assets or liabilities of any
materiality on acquisition. On this basis, the Acquisition is not
expected to generate any goodwill.
The Directors believe that, following completion, the
Acquisition will generate EBITDA of approximately GBP200,000 per
annum for the Group. No additional overheads are expected to be
required as a result of the Acquisition.
Following completion, the business, trading at present under the
"Excelbus" brand, will be subsumed into the Company's Diamond Bus
business operating out of its existing Redditch depot and the buses
will be rebranded into Diamond Bus livery. Approximately 60
employees are expected to transfer to Diamond Bus with the
business. T he Acquisition will extend the Group's network of bus
services in Warwickshire and the West Midlands and make more
efficient use of the capacity of the Company's Redditch depot.
Completion of the Acquisition is expected to occur on 29 May
2022, after giving due time for the necessary consultation with the
transferring employees under the Transfer of Undertakings
(Protection of Employment) Regulations 2006.
Simon Dunn, Chief Executive of Rotala, said : "In our recently
published Annual Report, we highlighted our belief that the Group
was very well placed to take advantage of the acquisition
opportunities that were likely to arise as commercial reality
returned to the bus industry after COVID 19. The Acquisition is an
example of such a transaction and we continue to look for
others.
The Acquisition also fits in with a key part of the Group's
strategy in seeking to consolidate smaller businesses in our
existing areas of operation so that we make better use of our
current depot capacity and so spread overheads over a larger
business, with a corresponding increase in business
efficiency."
For further information please contact:
Rotala Plc 0121 322 2222
John Gunn, Chairman
Simon Dunn, Chief Executive
Kim Taylor, Group Finance Director
Shore Capital 020 7408 4090
Tom Griffiths / James Thomas / Michael McGloin (Corporate Advisory)
Henry Willcocks (Corporate Broking)
About the business
Rotala provides a range of transport solutions, ranging from
local bus services under contract to local authorities, through to
commercial bus routes. Rotala has operations at Heathrow Airport,
in the West Midlands and in the North West. Operating companies are
Diamond Bus Ltd, Diamond Bus (North West) Ltd, Hallmark Connections
Ltd and Preston Bus Ltd.
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