Reuters: Bankruptcy News: UPDATE 1-Stagecoach expands in U.S. with Coach America deal

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UPDATE 1-Stagecoach expands in U.S. with Coach America deal May 18th 2012, 06:53 Fri May 18, 2012 2:53am EDT * To buy nine Coach America businesses for 85 mln stg * Deal will help it expand its U.S. megabus.com ops LONDON May 18 (Reuters) - British bus and rail operator Stagecoach has agreed to buy some of struggling Coach America's U.S. businesses, helping it grow its rapidly expanding North America operation. Scotland-based Stagecoach said on Friday it had agreed to buy nine of Coach America's businesses, including operations in Texas and California, for 85 million pounds ($134.4 million). It said the purchases would provide depot infrastructure, enabling it to expand its megabus.com budget coach network. "Our North American division is the fastest growing part of the group and this transaction will allow us to acquire selected businesses and vehicles at attractive prices in markets and regions we know well," said Stagecoach chief executive Brian Souter. "The acquisitions in Texas and California in particular will give us an extended geographic footprint to accelerate our growth strategy for the brand, which already covers around 80 key locations in North America." Coach America is a major operator of bus and coach services in the United States and has been operating under Chapter 11 bankruptcy protection since January 2012. The businesses being acquired include contract, line-run, charter and sightseeing operations. The U.S. market has been a bright spot for British transport operators. National Express reported a 5 percent increase in North America revenue in March, while FirstGroup said its U.S. school bus and Greyhound operations continued to perform well. Stagecoach's own North America bus business' like-for-like sales rose 14 percent in the 11 months to the end of March. Stagecoach, which transports some 2.5 million passengers a day, said it also had the option to buy up to 85 further coaches from the U.S. firm for around 16 million pounds. Stagecoach expects the deal to be approved by the United States Bankruptcy Court of Delaware next week. Shares in Stagecoach, which have outperformed the FTSE All Share Industrial Transportation Index by 8.6 percent in the last year, closed at 233.2 pence on Thursday, valuing the business at around 1.3 billion pounds. Link this Share this Digg this Email Reprints

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