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Arriva plc announced an agreement to acquire 21.5 per cent of the total equity of Barraqueiro SGPS SA (Barraqueiro), the leading Portuguese passenger transport operator, for a consideration of þ60 million in cash (approximately £41 million). Arriva will be entitled to appoint two directors to the nine-person board of Barraqueiro.
Barraqueiro is a privately-held family company. Its owners, the Pedrosa family, have developed the business into the largest passenger transport operator in Portugal, with 4,800 employees, 2,000 buses, and 18 train sets. It has key operating territories in the south of the country, and in and around Lisbon, including Fertagus, a fast-growing commuter rail operation in Lisbon, and a 34 per cent participation in the capital's new tram system. It has about 20 per cent of the Portuguese bus market, and is the country's only private passenger rail operator. It also has a currently loss-making freight business. This investment develops Arriva's relationship with Portugal's leading passenger transport operator, and provides Arriva with a stronger platform to take advantage of an evolving market, including the anticipated establishment of metropolitan transport authorities in the major cities of Lisbon and Porto.
In the year ending 31 December 2005, Barraqueiro had unaudited consolidated proforma revenue including Fertagus of þ268.4 million. On the same basis, profit after taxation was þ4.4 million. Unaudited consolidated net assets attributable to Barraqueiro shareholders at the year end were þ99.1 million. In the short term, Arriva anticipates the transaction will be broadly earnings neutral.
Arriva will purchase Barraqueiro's treasury shares, representing 15 per cent of the share capital, and will acquire the 6.5 per cent balance of the shares from the private shareholders. The majority of the cash from Arriva's investment will be invested in the business to contribute to growth. The agreement provides Arriva with a discretionary option to redeem its investment (plus interest) at various times up to 2011. The investment in Barraqueiro will have no impact on the operation of Arriva's Transportes Sul do Tejo (TST) business which operates 650 buses on the Setubal peninsula, south of Lisbon, nor on Arriva's inter-urban bus and coach services operated by 220 vehicles in northern Portugal. David Martin, chief executive of Arriva, said: "Barraqueiro has a strong, well respected management with a wealth of understanding of the market, and significant experience in multi-modal operations. This investment is another step in developing Arriva's access to the evolving public transport market in Portugal." Source: Press Release
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