COMFORTDELGRO on Tuesday (Feb 13) announced that its wholly owned subsidiary has acquired CMAC Group, a UK-based ground-transport management and accommodation network specialist, for £80.2 million (S$135.4 million).
The deal was funded through the group’s bank facilities. Post-completion, CMAC will become ComfortDelGro’s indirect subsidiary, the transport operator said.
The move comes amid the group’s plan to expand its point-to-point mobility services and offerings in the region.
CMAC provides wide-ranging emergency passenger-transport services to businesses in the rail, travel, healthcare, corporate and public sectors.
It also has an extensive network of approved and certified suppliers that provide specialised, pre-planned and on-demand emergency passenger transport and accommodation solutions.
Its operations cover the UK, France, Spain, Portugal, Greece and the Netherlands, where it steps in to help manage disruptions and journeys on behalf of airlines, ground handlers, train operators and companies.
It also manages, through its Suntransfers brand, private and ride-share transfers to over 500 airports, bus and train stations, as well as ports globally.
ComfortDelGro managing director and group chief executive Cheng Siak Kian said CMAC complements the group’s operations in the UK and Europe, enabling the group to expand its business-to-business offerings in the region.
The acquisition will also enable CMAC to tap the group’s deep market knowledge to grow its business and reach.
ComfortDelGro does not expect the acquisition to have a material impact on its earnings per share for the financial year ending Dec 31, 2024.
DBS Group Research said that the acquisition is in line with ComfortDelGro’s overall strategy to diversify into higher-margin, related businesses, and away from the low-margin public-transport operation business in the UK.
Analyst Andy Sim expects a net earnings contribution of S$1.7 million to S$2 million to FY2024, assuming 100 per cent debt funding at 5 per cent interest.
“We continue to see further earnings accretive acquisitions in the pipeline, with ComfortDelGro’s still-strong balance sheet,” he said.
He also believes there is potential synergy in onboarding ComfortDelGro’s existing private-hire fleet in the UK on CMAC’s platform.
The acquisition comes on the heels of the group expanding its footprint in Europe.
In January, ComfortDelGro’s joint venture with British transport group Go-Ahead secured an 11-year contract to operate and maintain the Stockholm Metro in Sweden, its largest rail-passenger operation outside Singapore, from May 2025.
One of its units also won a six-year contract to operate rail services in Paris in July 2023.
The group’s latest acquisition in the UK was a private-hire company called Vedamain in March for £7.25 million.
The group has also continued to dig deeper into other markets. In December 2023, it agreed to fully acquire taxi operator A2B Australia for A$165.1 million (S$145.7 million), from a previous stake of around 9.3 per cent.
Last October, it injected US$2 million into shared mobility platform Drive lah, which is known as Drive mate in Australia, and agreed to progressively supply up to 3,000 vehicles to Drive mate’s platform in Sydney and Melbourne.
The group’s full-year financial results for FY2023 will be released on Feb 29.
After the announcement, shares of ComfortDelGro closed down 0.7 per cent or S$0.01 to S$1.39.
