FirstGroup to receive roughly $85m from First Transit earnout consideration

26th Oct 2022 08:05

(Sharecast News) - Transport operator FirstGroup said on Wednesday that it was set to receive roughly $85.0m from an earnout consideration linked to the sale of First Transit.

FirstGroup stated that affiliates of EQT Infrastructure had signed an agreement to sell First Transit to Transdev North America and that the firm was now entitled to an earnout consideration - calculated as a percentage of the realised equity value on the sale and contemplating cash flows generated by First Transit since March 2021 until completion.

The London-listed group added that based on the consideration's estimated value, it expects to record a non-cash loss of approximately £30.0m relative to the carrying value of the earnout of £106.0m as at 26 March.

FirstGroup added that the final earnout consideration amount would be determined in the period following completion of the sale by EQT, with receipt expected several months after completion.

Chief executive 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."

As of 0905 BST, FirstGroup shares were down 2.84% at 106.0p.

Reporting by Iain Gilbert at Sharecast.com