Transport company hits acquisition trail
Expanding bus company Rotala has bought a West Midlands competitor and is in talks to take over a Manchester operator as it looks to strengthen its presence in major conurbations.
Birmingham-based Rotala is spending around £1m on the acquisition of Hansons, in Stourbridge, once associated capital expenditure costs have been added in.
It is planning to invest the same amount on a target company in Manchester it is in talks with, which would provide it with a freehold site and 18 buses, and add to its platform to take the opportunities it sees around re-franchising in Greater Manchester.
The £55m-turnover group plans to fund the deals through a £2.0m subscription and is also looking to raise a further £1.5m through a placing to support other takeover opportunities.
“Rotala has a proven track record of steady organic growth supplemented by sensibly priced acquisitions,” said chairman John Gunn.
In 2016 it bought three businesses, which expanded its operations at Heathrow Airport and provided a stronger foothold in the North West.
Gunn added: “The acquisition that we are making and the further acquisition that we expect shortly to make with the first stage of this fundraising are in line with this policy and will bolster our presence in the West Midlands and the North West.
“The follow on acquisitions, if and when completed, will add greater reach to the Group’s business in key markets and put the Group in a position where it can look forward to continuing progress in 2018.”
The company believes the Hanson acquisition “will cement Rotala as the second largest operator in the West Midlands” and will strengthen the company’s negotiating position for tendered services in the future.
Its fleet of 25 buses and operates in and around the Black Country, which will now move over to two of Rotala’s existing depots in Tividale and Kidderminster.
Hansons generates annual revenues of £2.0m, Rotala is forecasting a £400,000 contribution to its earnings once Hansons has been integrated, and its existing depot has been sold.
