Coach company expands with £1m acquisition deal

Bus and coach company Rotala is set for further expansion after agreeing a new acquisition deal.

The West Midlands company said it had reached an agreement to acquire Manchester-based bus and minibus business, Go Goodwins in a deal worth expected to reach £1m.

Goodwins comprises 18 buses and a freehold property in the Manchester area. It also benefits from bus service contracts with Transport for Greater Manchester.

While the initial assets will be dealt with in terms of a cash payment of £692,000, the total expected cost is estimated at £1m, including the necessary working capital and capital expenditure associated with the deal.

“The (Rotala) directors believe that the Goodwins acquisition will enable Rotala to significantly grow its operations in the Manchester area and potentially double its bus capacity,” the company said in an announcement to the markets.

“No additional overheads are expected to be required as a result of the acquisition and the directors believe that the company will benefit from additional sales, gross profit and EBITDA contributions of approximately £2m, £0.4m and £0.2m respectively in the first full year (of ownership).”

The acquisition agreement is expected to complete on Thursday (August 31).

The deal is being funded from the proceeds of a £3.5m share placing and subscription announced by Tividale-based Rotala in July.