FirstGroup PLC on Wednesday said it is entitled to an earnout as affiliates of EQT Infrastructure signed an agreement to sell First Transit to Transdev North America Inc, the Canada and US-focused subsidiary of French public transport operator Transdev.
Aberdeen, Scotland-based transport operator FirstGroup estimates the earnout to be around $85 million.
The sale is subject to regulatory and antitrust clearance processes in the US and Canada.
In July 2021, FirstGroup sold First Student and First Transit to Stockholm-based EQT Infrastructure, an asset of investment firm EQT Group, for net disposal proceeds of $3.12 billion. Gain on the sale of the division before tax was £501.1 million, FirstGroup said in June.
FirstGroup on Wednesday said: ‘As part of the First Transit disposal to EQT Infrastructure, FirstGroup is entitled to an earnout consideration, which is calculated as a percentage of the realised equity value on the Sale by EQT and contemplating the cash flows generated by First Transit since March 2021 to completion, subject to certain permitted leakage provisions.’
FirstGroup Chief Executive Officer Graham Sutherland said: ‘Receipt of the First Transit earnout proceeds will be another milestone in the transformation that FirstGroup has undertaken in recent years to refocus on our strong positions in UK bus and rail. The earnout proceeds will further strengthen our business, which is now a resilient and robust platform with a range of opportunities for growth and shareholder value creation.’
FirstGroup shares were 1.7% lower at 107.20 pence each in London on Wednesday morning.
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