Mobico to sell National Express West Midlands bus business - Bus & Coach Buyer
Mobico Group (National Express’ parent company) has reached an agreement in principle to sell the net assets and operations of its WM Bus business to West Midland Combined Authority (WMCA). The transaction values the assets at approximately £102m, which Mobico says is broadly in line with book value, with expected upfront residual proceeds of around £24m after […]
Mobico Group(National Express’ parent company) has reached an agreement in principle tosell the net assets and operationsof itsWM Bus businesstoWest Midland Combined Authority (WMCA). The transaction values the assets at approximately £102m, which Mobico says is broadly in line with book value, with expected upfront residual proceeds of around £24m after deductions for transferred liabilities. The agreement will see WMCA take control of the business, its operations and employees as the region moves towards bus franchising. Mobico says the transaction is consistent with the Group’s strategy to simplify the business and monetise its WM Bus assets. WM Bus currently operates around 1,400 buses and has served communities across the region for around 40 years. It runs approximately 1,400 buses, around 120m passenger journeys and an annual service mileage in the region of 54m miles. Financial pressures have meant the business has been running at a broadly break-even level of profitability for a number of years as well as being heavily reliant on local authority network funding. Mobico considers WMCA a highly credible buyer for the business, including for its assets which would likely have been sold to WMCA over the coming years as the region shifts towards franchising. Subject to the planned internal restructuring, completion is expected around November 2026. “We have worked closely with the West Midlands Combined Authority (WMCA) to help find the most effective way of introducing bus franchising” – Paco Iglesias, Group CEO, Mobico GroupPaco Iglesias, Group CEO, Mobico Group, said: “We have been proud to serve the people and communities of the West Midlands for some 40 years, supporting 210 million passenger journeys a year in the region. This has only been possible thanks to the thousands of colleagues who have relentlessly delivered a safe, reliable and accessible bus service day in, day out. “We have worked closely with the West Midlands Combined Authority (WMCA) to help find the most effective way of introducing bus franchising. This is an important step in that process, providing continuity for passengers and colleagues, and we look forward to working with the WMCA to ensure a smooth handover in the coming months. “The bus franchise model being introduced is right for the region. We are readying to participate in future tendering processes for bus franchises in the West Midlands and across the UK. ”“This agreement is another significant milestone in making Mobico simpler and stronger while substantially de-risking the Group” – Phil White, Executive Chair of MobicoPhil White, Executive Chair of Mobico, said: “This agreement is another significant milestone in making Mobico simpler and stronger while substantially de-risking the Group. UK Bus has been break-even for a number of years and the uncertainty of future franchising in the area presented a significant headwind for the Group in managing the cost base and liabilities of the business going forward. “As the West Midlands moves toward a franchised network, WMCA is the logical buyer to facilitate that transition. The transaction represents fair value for the assets and liabilities of UK Bus while providing certainty for our colleagues upon completion. ”