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    SLK   AU000000SLK1

SEALINK TRAVEL GROUP LIMITED

(SLK)
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SeaLink Travel : Expands into Resources Transportation Sector

05/05/2021 | 09:55pm EDT

SeaLink Travel Group Limited (ASX:SLK) ('SeaLink') announces that today it has entered into binding agreements (subject to certain conditions precedent) to acquire 100% of the WA-based Go West Tours ('Go West') from the Vendors1 for an enterprise value of A$84.7 million2 plus an earn- out component of up to A$25.0 million. In addition, SeaLink3 will purchase strategic property assets4 comprising three depots for A$3.8 million (together the 'Acquisition').

The Acquisition including the purchase of the property assets is comprised as follows:

  • Upfront consideration: A$72.4 million payable on completion2,5
  • Deferred contingent consideration: A$16.1 million payable in equal tranches over two years provided current earnings levels are maintained in FY22 and FY23
  • Earn-out consideration: up to A$25.0 million based on exceeding specific financial hurdles over the period to 30 June 2023 The Acquisition will be funded from existing cash reserves and existing undrawn senior debt facilities and is expected to be high single-digit EPS accretive in the first full year6.

The implied transaction multiple based on up-front and deferred contingent consideration is 5.3x normalised LTM EBITDA7.

The Acquisition is expected to complete in early July 2021.

Completion of the Acquisition is subject to certain conditions precedent standard for transactions of this nature. Transaction costs of approximately A$2.0 million are expected to be incurred by SeaLink.

**Overview **

Established over 35 years ago, Go West is one of the largest specialist bus operators serving the resources sector in WA (charter, rental and tour vehicles) with a modern bus fleet of approximately 287 buses across 9 depots in WA and approximately 181 employees8.

Go West has enjoyed strong growth in recent years, winning multi-year contracts with leading mining companies and other regional services such as school bus transfers. Go West generated approximately A$46.2 million of revenue in the 12 months to 30 September 2020 and maintains an attractive tender pipeline of new contract opportunities in WA.

The key strategic and commercial rationale for the Acquisition includes:

  • Market leading, high quality operator with a first-class safety record and strong track record supporting leading mining companies
  • Platform for growth into the attractive WA resources transportation market
  • Complementary bus services under contract to the WA Government, with Go West delivering regional public school bus services under long-term contracts with limited patronage risk
  • Enhanced end-market diversification through exposure to the large resources sector, particularly the WA iron ore market
  • Solid contract tender pipeline offering further growth potential, enhanced through leveraging SeaLink's existing tendering experience and processes
  • Existing experienced management team retained SeaLink's Group Chief Executive Officer, Clint Feuerherdt, said, 'The acquisition of Go West provides SeaLink with a unique opportunity to expand into a new market that is highly complementary to our existing Australian bus transport capabilities.' 'Go West has valuable contract counterparties and delivers an essential service for these clients. The operations of Go West were unaffected by the COVID-19 pandemic and continued at near 100% levels throughout, keeping their communities and worksites connected.'

'The Go West team has built a high-quality business focused on providing great service whilst maintaining high safety standards for their clients. Our intention is to retain the well-recognised and established Go West brand and continue to work with, and support, Go West's existing client base. We are very excited about the growth opportunities this acquisition provides SeaLink and look forward to welcoming all of Go West's employees to the Group.'

*Authorised for release byMr Clint Feuerherdt, Group Chief Executive Officer SeaLink Travel Group Limited *

Further information

For further information, please contact:

Clint Feuerherdt
Group Chief Executive Officer
+61 8 8202 8659

Andrew Muir
Chief Financial Officer
+61 8 8202 8693

About SeaLink Travel Group Limited (ASX:SLK)

SeaLink is Australia's largest integrated land and marine, tourism and public transport service provider with established international operations in London and Singapore.

It is one of Australia's most experienced and diverse multi-modal transport businesses, boasting performance-driven capabilities across ferry, bus and light rail.

SeaLink is made up of Australian marine and tourism operations and Transit Systems' domestic and international public bus and light rail transport operations.

SeaLink moves more than 206 million customers per year, has over 8,900 employees and operates approximately 3,500 buses and 118 vessels.

Disclaimer

Sealink Travel Group Ltd. published this content on 06 May 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 May 2021 01:54:00 UTC.


ę Publicnow 2021
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Financials
Sales 2021 1 168 M 862 M 862 M
Net income 2021 54,5 M 40,2 M 40,2 M
Net Debt 2021 250 M 185 M 185 M
P/E ratio 2021 35,2x
Yield 2021 1,65%
Capitalization 2 110 M 1 549 M 1 557 M
EV / Sales 2021 2,02x
EV / Sales 2022 1,75x
Nbr of Employees 672
Free-Float 54,4%
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Number of Analysts 7
Last Close Price 9,66 AUD
Average target price 10,18 AUD
Spread / Average Target 5,38%
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Managers and Directors
Clint Feuerherdt Group Chief Executive Officer
Andrew David Muir Chief Financial Officer & Co-Secretary
Jeffrey R. Ellison Chairman
C. Beaumont Chief Operating Officer-International
Lance E. Hockridge Independent Non-Executive Director
Sector and Competitors