Tourist and travel services provider SeaLink Travel Group (ASX:SLK)
has inked a $114 million deal to purchase Western Australia-based operator of modern charter, rental and tour vehicles Go West.
The payment package is divided into 3 components- an upfront cash consideration of $84.7 million for its enterprise value, a $3.8 million payment for three depot property assets and a $25 million add-on subject to milestone accomplishments.
The new acquisition will add 287 buses to Sealink’s comprehensive fleet of charter, rental and touring vehicles, and complements the group’s growth strategy for the existing bus division.
Go West’s established network of leisure, educational & professional travel assets is expected to bolster the $2.1 billion transport company’s presence in the travel market of Western Australia.
Go West is recently engaged in many long-term contracts with industry leaders in mining, education and tourism. Western Australia’s leading integrated transport provider generated $46.2 million in income from transport operations in the twelve-month period ending on September 2020.
Sealink commented on Go West’s performance in the face of pandemic challenges, “The operations of Go West were unaffected by the COVID-19 pandemic and continued at near 100 per cent levels throughout, keeping their communities and worksites connected,”
Sealink has revealed its intentions to expand on Go West’s existing infrastructure and assets to maximise growth and optimise profits from the new acquisition.
Sealink said, “Our intention is to retain the well-recognised and established Go West brand and continue to work with, and support, Go West’s existing client base.”
The takeover process is expected to be finalised by August this year.
Shares in SeaLink Travel Group are trading 2.4 per cent higher at $10.07