FirstGroup Plc, a leading provider of public transport services in the UK, announced on Tuesday that it has entered into an agreement to acquire RATP Dev Transit London Limited and its subsidiaries from RATP Développement SA of France. The deal has been valued at an enterprise figure of £90 million.
The enterprise valuation is largely backed by approximately £100 million worth of tangible assets, which includes about £50 million in freehold properties.
RATP London is a significant bus operator in the capital, commanding approximately 12% of the market share. It operates 10 depots across Central and West London—four of which are owned and six that are leased—and maintains a fleet comprising around 1,000 buses, with one-third being fully electric. The company employs around 3,700 people, with over 80% serving as drivers. The current management team of RATP London is expected to transition with the business and remain post-acquisition.
In 2023, RATP London reported revenues totaling £271 million.
The acquisition will be financed through £45 million from FirstGroup's existing cash reserves, alongside the assumption of existing asset-backed vehicle finance leases from RATP London.
Post-acquisition, FirstGroup forecasts that the transaction will be largely earnings-neutral for the fiscal years 2025 and 2026.
As the route contract portfolio develops over the subsequent five years, annual revenues are projected to reach between £300 million and £350 million, with operating margins anticipated to align with historical London levels of approximately 6-7%.
The acquisition will require approval from the French government, owning the business at the ultimate level, and is contingent upon obtaining consent from Transport for London (TfL) for the change of control.
FirstGroup expects the acquisition to be finalized in the first half of the calendar year 2025.
