Mobico: National Express owner rises after tying up US school bus sale
Shares in Mobico jumped on Tuesday after the owner of National Express closed a deal with private equity for its North American school bus business.
The London-listed transport group announced the £457m sale to I Squared Capital back in March as it looked to cut costs and revitalise the business following a string of downbeat updates.
Approval from the US Surface Transportation Board, a regulatory agency, was granted last week, clearing the final hurdle for the much-awaited transaction.
Net upfront proceeds are expected to reach £273m and will be used to trim Mobico’s more than £1bn debt pile, the company said in a statement to markets.
There is also a £52m earn out contingent on the school bus unit hitting certain revenue, profit and cash flow targets.
Shares rose more than five per cent in early deals as Mobico also doubled down on annual guidance for adjusted operating profit of between £180m and £195m.
Shares in the FTSE 250 firm, which rebranded from National Express in 2023, have floundered in recent years after multiple profit warnings and an accounting hitch that saw its annual results delayed last year.
The stock is down just over 44 per cent over the last twelve months.
In April, Mobico’s chief executive, Ignacio Garat, stepped down after nearly five years in the top job.
He was replaced on an interim basis by Phil White, the chair of the company, who held the top job between 1997 and 2006.
Mobico has ‘strong liquidity’
Mobico said it continued “to have strong liquidity with no significant debt maturities” due until the second half of 2027, with the sale of School Bus providing “sufficient proceeds to cover those maturities.”
“The increased financial flexibility the transaction provides, combined with ongoing operational improvements, will enable the group to focus on its objective to de-leverage,” it added.
