Keppel Infrastructure Trust (KIT) is acquiring an approximately 98.6% stake in Ventura Motors, the largest bus service business in Victoria, Australia for an enterprise value of A$600 million ($540 million).
Ventura managing director Andrew Cornwall will remain as CEO and retain a minority stake in the business.
The transaction is expected to be completed in 2Q2024, subject to the conditions precedent including the approval from the Australian Foreign Investment Review Board and consent from Victoria's head of transport.
Keppel Infrastructure Fund Management (KIFM), the trustee-manager of KIT, intends to fund the investment with an optimal combination of internal sources of funds; equity and debt capital market issues; and external borrowings.
Upon completion of the transaction, KIT’s assets under management will grow from $8.1 billion as at Jan 2 to approximately $8.7 billion.
Headquartered in Melbourne, Ventura was established in 1924 and transports more than 42 million people annually. With a fleet of approximately 900 buses and 12 depots, Ventura has the largest market share of public bus services in Victoria, operating approximately 530 routes out of Melbourne’s total 1,200 routes.
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As over 80% of Ventura’s revenues are derived from long-term government route services, the majority of its income does not fluctuate with the volume of passengers or fares collected, providing inflation-protected revenues.
Aside from operating government route services, Ventura is also one of the largest bus charter service businesses in Victoria, servicing about 150 schools as well as providing bus services for tourism destinations and general charter.
KIFM CEO Kevin Neo says Ventura is a good match for KIT’s portfolio as it generates stable, recurring and predictable cash flows. “As the new owner, KIT will further the successes of the Ventura team as the business enters its next phase of growth, supporting the Victorian government’s drive for zero-emission bus services,” he adds.
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Units in KIT closed at an unchanged 51 cent on Feb 2.
