For Sale

[Tony]

Page 1
Acquisition
Released : 24/01/2013
RNS Number : 2502W
Rotala PLC
24 January 2013

24 January 2013
Rotala plc
("Rotala" or "the Company")

Acquisition in Worcestershire

Rotala is pleased to announce the acquisition from First Group Plc ("First") of certain of their bus
operations in Worcestershire. Rotala will acquire, for a cash consideration of £1.5 million, two freehold
depots, one in Kidderminster and the other in Redditch, 36 vehicles, and various items of plant and
equipment, and will continue to run the services that First currently operate from these depots (the
"Acquisition").

The Kidderminster depot comprises a site of some two acres and was purpose built in 2001. It can
accommodate up to 60 vehicles. The Redditch depot, built about 35 years ago, has a slightly smaller
useable area and can accommodate about 50 vehicles. In the year ended 30 June 2012, these depots
reported combined revenues of approximately £5.2 million and an operating loss of £0.27 million. They
employ about 120 staff.

The Acquisition will enable the Company to expand and consolidate its position in those areas of
Worcestershire which are contiguous to its main areas of operation in the Birmingham conurbation. By
integrating these acquired depots into its current depot network, the Company will be able to take
advantage of operating efficiencies generated by the Acquisition.

The Acquisition is not expected to have a material impact on earnings in the current financial year. Once
the integration of operations and overheads has been fully implemented, the Acquisition is expected to
have a beneficial effect on earnings in the following years. On the basis of the information available at Present the acquision is expected to generate a small amount of negative goodwill

[Tony]

Note in the Rotala announcement it says Kidderminster garage is capable of holding 60 vehicles. The Estimates of 100 and 160 made last month seem to be a little over the top!

[the trainbasher]

Kidderminster is possible to be OKd but Redditch is more than likely to get told no.

I think the remaining lances and other step stuff might get withdrawn with possibly the P reg Darts too

Are the presidents Euro 3 or Euro 4 compliant?

[winston]

Note in the Rotala announcement it says Kidderminster garage is capable of holding 60 vehicles. The Estimates of 100 and 160 made last month seem to be a little over the top!

Rotala would have to virtually triple the services operated to fill KR

[midlandred2003]

Why only 36 vehicles when I believe the current allocation of the 2 garages is 60?

[winston]

Why only 36 vehicles when I believe the current allocation of the 2 garages is 60?

I think the current Wyvern combined fleet for RH (31) & KR (20) is around 51 buses, not doubt if the deal gets the go ahead by the Oft Rotala will be able to rationalize the combined fleet once the competition is out of the way, which my account for some of the difference. Plus Rotala currently have plenty of excess Dart SLF's spare that are newer than what First currently operate out of KR

How long until WR & HD go now that the Wyvern network will be broken?

[midlandred2003]

Yes I had failed to add diamonds current allocation at redditch,so thats about right,but surely the OFT will step in regarding Redditch?

[winston]

Yes I had failed to add diamonds current allocation at redditch,so thats about right,but surely the OFT will step in regarding Redditch?

I don't see how they can't get involved, it will result in a monopoly.... You would think however, that Rotala would have got assurances from the Oft that the deal wouldn't be investigated first?

[Discodave]

Rotala are full of suprises but look at Black diamond still have a lot of knackered dennis buses and now buying up other operations looks like black diamond will lose out again as well as Brum can't comment on First but a lot of the good stuff they have will get shifted quickly away from Redditch and Kidderminster.  Wonder how NX are feeling? Still would question any OFT involvement Red diamond would be quite big as both would be absorbed into it.  But you still have Whittles not a complete monopoly in Worcestershire as a whole plus First are still dominant in Worcester.  A possible sale with no OFT of both areas.  Help me out if there any things I have missed?

[winston]

Rotala are full of suprises but look at Black diamond still have a lot of knackered dennis buses and now buying up other operations looks like black diamond will lose out again as well as Brum can't comment on First but a lot of the good stuff they have will get shifted quickly away from Redditch and Kidderminster.  Wonder how NX are feeling? Still would question any OFT involvement Red diamond would be quite big as both would be absorbed into it.  But you still have Whittles not a complete monopoly in Worcestershire as a whole plus First are still dominant in Worcester.  A possible sale with no OFT of both areas.  Help me out if there any things I have missed?

I guess NX weren't that interested in the finish, if they had of been they would have agreed a deal over Rotala. I thought NX may have bought those operations to compete against Rotala in other areas, but seems not....

I still don't think Rotala buying Redditch is a done deal yet.....

[tank90]

I have a funny feeling that First aren't getting rid of Redditch this time around as Diamond would have bought all the Redditch services bar main 26, 50A,52, 59, X50, 158 and 350 plus only few other services so I can't see it happening some how. And if Essex had been more on the ball with London Midlands balls up on cross city Redditch coul dhave made more with an extended operating time for the 146 with a 146 fare that was cheaper than the train.

[PM]

I have a funny feeling that First aren't getting rid of Redditch this time around as Diamond would have bought all the Redditch services bar main 26, 50A,52, 59, X50, 158 and 350 plus only few other services so I can't see it happening some how. And if Essex had been more on the ball with London Midlands balls up on cross city Redditch coul dhave made more with an extended operating time for the 146 with a 146 fare that was cheaper than the train.

Do you realise its just been sold??!!

[winston]

I have a funny feeling that First aren't getting rid of Redditch this time around as Diamond would have bought all the Redditch services bar main 26, 50A,52, 59, X50, 158 and 350 plus only few other services so I can't see it happening some how. And if Essex had been more on the ball with London Midlands balls up on cross city Redditch coul dhave made more with an extended operating time for the 146 with a 146 fare that was cheaper than the train.

The deal has already been agreed unless the Oft block the Redditch takeover

[PM]

I'll be interested to see what happens next. Clearly, if the oft dont block the sale, rotala should be able to restructure, maybe close one redditch depot and make savings by reducing the workforce-something they certainly havent ruled out doing in kidderminster and rationalising the network. Clearly, many members of the fleet are quite youthful-but the question is does rotala want the presidents and the e300s when in the case of the enviros nowhere else runs them. If the sale goes through, it would make sense to sell the presidents and possibly the e300s-nasty buses-and cascade b7rles up from wessex as replacements. I wonder if rotala will remove the b7rles from the for sale list now so as they can be used in redditch. Potentially if the sales arent blocked, rotala could make some pretty decent money in redditch and kidderminster and i imagine that if hereford and worcester ever appear on the for sale list then rotala will try and buy them. I must say im very pleased and i hope that the oft see sense and realise that this acquisition is in the interests of passengers and I hope rotala make a good job of integrating first's services and its own services to create a good network.

[PM]

By the looks of it theres political support for the change

http://www.redditchstandard.co.uk/2013/01/24/news-Service-merge-after-bus-depot-buyout-61320.html