National Express Group PLC National Express acquires 60% stake in WeDriveU (9788V)

TIDMNEX

RNS Number : 9788V

National Express Group PLC

12 April 2019

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF EU REGULATION 596/2014.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.

National Express acquires majority stake in Silicon Valley's premier employee shuttle company

-- Acquisition of 60% stake in WeDriveU, an employee shuttle company serving many of the world's largest and fastest growing companies in Silicon Valley

   --     Option to acquire remaining shares in tranches over next three years 
   --     Earnings accretive from completion of the transaction 

-- Positions National Express as a leader in a fast-growing region and market segment and provides further growth opportunities across North America

-- Further diversifies our North American operations, with $0.5 billion annualised revenue now generated outside of School Bus

   --     Cash consideration of $84.3 million for an initial 60% equity stake 
   --     Transaction multiple of 7 times rolling 12 months EBITDA 

National Express Group PLC ("National Express") is pleased to announce the acquisition (the "Transaction") of 60 percent of the shares of WeDriveU Holdings Inc. ("WeDriveU"), Silicon Valley's premier employee shuttle company.

WeDriveU provides employee shuttle services to many of the largest Fortune 500 companies based in Silicon Valley and the broader San Francisco Bay Area. It also has a presence in several other fast-growing US cities (such as Los Angeles, Seattle, Boston, Portland, Denver and Austin), presenting other platforms for growth in the employee shuttle market. The business has grown rapidly in recent years, as many new contracts have been won and existing customers' services have expanded.

The remaining WeDriveU shares are held by Dennis Carlson (the CEO) and the senior management team, who will remain in place to oversee the next phase of their expansion. As part of the Transaction, National Express and the WeDriveU management team retain call and put options, respectively, over the remaining shares, exercisable annually over the next three years, with the option price determined by reference to WeDriveU's profitability.

With this acquisition National Express will form a new shuttle division within its North American business, led by the WeDriveU management team, to drive expansion in the employee, university and hospital shuttle markets. Together these US markets are worth over $5 billion in annual revenue.

WeDriveU transports almost 7 million passengers annually and is an asset light business. In the year ended 31 December 2018, it generated annual revenues of $139.9 million, normalised EBITDA of $21.1 million and normalised operating profit of $15.4 million; as at 31 December 2018 gross assets were $80 million. The Transaction will be earnings accretive from completion.

Dean Finch, CEO of National Express Group, said: "I am delighted WeDriveU are joining National Express as part of our strategic acquisition programme. As the premier operator in Silicon Valley and the wider San Francisco Bay Area, WeDriveU provides the opportunity for expansion into a fast-growing market. WeDriveU also has a presence in other fast-growing cities in the US, which present other platforms for growth in this very attractive market.

"I am impressed with the growth Dennis has achieved in recent years and the whole business' commitment to safety and customer service, which mirrors our own. I look forward to working with Dennis and his team to achieve their exciting growth plans and exploit additional, complementary opportunities as part of National Express Group to deliver further value to our shareholders."

WeDriveU's Chairman and CEO Dennis Carlson said: "I am delighted to be joining National Express. We have grown our business significantly in recent years and plan to continue expanding into new markets, drawing on National Express' reputation for excellence and its extensive nationwide presence. I look forward to working with Dean and the team in this exciting next phase for our business."

The person responsible for making this announcement on behalf of National Express is Jennifer Myram, Company Secretary.

Enquiries

National Express Group PLC

 
Chris Davies, Group Finance Director             0121 460 8655 
Anthony Vigor, Director of Policy and External 
 Affairs                                         07767 425822 
Louise Richardson, Head of Investor Relations    07827 807766 
 

Maitland

 
Neil Bennett and James McFarlane   020 7379 5151 
 

Notes:

Normalised EBITDA and operating profit exclude expenses that will be transferred to the vendor as a consequence of this transaction.

Legal Entity Identifier: 213800A8IQEMY8PA5X34.

About WeDriveU

WeDriveU is the leader in transportation solutions, specialising in corporate shuttles serving 7 million annual passengers nationwide. Recognised as a pioneer in mobility, WeDriveU is a strategic partner to the world's top brands, with client programmes that consistently earn awards for excellence in commuting and sustainability. https://www.wedriveu.com

About National Express Group

National Express Group is a leading public transport operator with bus, coach and rail services in the UK, Continental Europe, North Africa, North America and the Middle East. The Group has a fleet of over 30,000 vehicles and 900 million journeys are made on National Express services each year. National Express Group is quoted on the London Stock Exchange (NEX.L), and is a constituent of the FTSE 250 with 2018 underlying revenue of GBP2.45 billion. Further information on National Express Group can be found at: http://www.nationalexpressgroup.com.

Cautionary statement

Information set forth in this announcement may contain certain 'forward-looking statements' with respect to National Express Group PLC ('Company' or 'Group') and the Group's financial condition, results of its operations and business, and certain plans, strategy, objectives, goals and expectations with respect to these items and the economies and markets in which the Group operates.

Forward-looking statements are sometimes, but not always, identified by their use of a date in the future or such words as 'anticipates', 'aims', 'due', 'could', 'may', 'should', 'will', 'would', 'expects', 'believes', 'intends', 'plans', 'targets', 'goal' or 'estimates' or, in each case, their negative or other variations or comparable terminology. Forward-looking statements are not guarantees of future performance. By their very nature, forward-looking statements are inherently unpredictable, speculative and involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. Many of these assumptions, risks and uncertainties relate to factors that are beyond the Group's ability to control or estimate precisely. There are a number of such factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. These factors include, but are not limited to, changes in the political conditions, economies and markets in which the Group operates (including the outcome of the negotiations to leave the EU); changes in the legal, regulatory and competition frameworks in which the Group operates; changes in the markets from which the Group raises finance; the impact of legal or other proceedings against or which affect the Group; changes in accounting practices and interpretation of accounting standards under IFRS, and changes in interest and exchange rates.

Any forward-looking statements made in this announcement, or made subsequently, which are attributable to the Company or any other member of the Group, or persons acting on their behalf, are expressly qualified in their entirety by the factors referred to above. Each forward-looking statement speaks only as of the date it is made. Except as required by its legal or statutory obligations, the Company does not intend to update any forward-looking statements.

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April 12, 2019 02:00 ET (06:00 GMT)