FirstGroup snaps up Sheffield buses

One of Britain's fastest growing private transport operators has completed another strategic acquisition.

FirstGroup, which runs Great Western rail franchise as well as bus services, has made an agreed offer to take over the remaining shares in Sheffield bus company Mainline Partnership for £29.7m ($40.2m).

It already owns 20% of the company.

The deal values Mainline at £37.1m ($60.4m). The company employs 2,300 people and has a fleet of 700 buses operating in Rotherham, Doncaster, and Sheffield.

Under the deal, Mainline shareholders will receive £160 in cash and 111.24 FirstGroup shares for every 100 shares they own.

The firm also announced profits up £21.5m for the year to £72.5m on turnover of £795m (£557.3m). The full year dividend was raised to 6.6p from 5.5p last year.

Chairman Trevor Smallwood said: "We are now firmly established as a broadly based international passenger transport group and we remain confident of the prospects for the group."

Rapid expansion

FirstGroup, which was formed by a merger between Badgerline and GRT Bus Group in 1995, has expanded rapidly to become one of the largest bus operators in the UK.

Firstgoup has moved into trains as well as buses

It has moved into other transport sectors. In December it acquired Bristol International Airport. In March it completed its acquisition of Great Western Holdings, which operates the Great Western and North West Regional Railways franchises, for £105m.

The company has also formed a joint venture with New World Development to operate bus services in Hong Kong.

FirstGroup's rapid expansion has fuelled its share price, with its market capitalisation nearly doubling in the last year.

Shares in the company slipped 3p to 428 1/2p on the news.

And the company's profits - also announced on Monday - showed an increase of 42% to £72.5.m on sales of £795m. The dividend was increased to 6.6p.