German transportation startup FlixMobility that has slowly but gradually taken over Europe’s transit lines and operations has announced the acquisition of US bus company Greyhound Lines from its UK-based owner FirstGroup. The acquisition is part of the FlixMobility’s plans to take over the U.S. transportation sector where its presence is not so major.
FlixMobility offers transportation services through its brands Flixbus which is operational in Europe and the US. It also operates other products called FlixTrain and FlixCar and are all owned by FlixMobility GmbH. According to the company, the acquisition includes Greyhound Lines’ fleet, trademarks and related assets and liabilities. The deal has an enterprise value on a cash and debt free basis of $46 million and an unconditional deferred consideration of $32 million with an interest rate of 5 percent per year alongside that.
Greyhound Lines was acquired in 2007 in a $3.6b deal as part of FirstGroup’s plans to take a strong hold of the U.S. market. FirstGroup also went ahead to acquire American transportation and logistics company Ryder known for its fleet of commercial rental trucks, at almost the same time. All these were efforts to become a big competitor in the U.S. transportation sector. Of late, UK-based FirstGroup has been selling off part of its assets and is placing its focus on the U.K market. In fact, it has been looking to sell off Greyhound Lines assets since 2019. In December last year, it sold Greyhound’s facilities for $138 million and sold a huge part of the business excluding Greyhound transit network to EQT in April this year.
The acquisition of Greyhound Lines by Flix automatically translates to raising Flix’s profile in the U.S. market. Although Flix services are already available in the US market, the company is rather a small brand in the U.S.
Greyhound operates in 2,400 destinations in North America with about 16 million passengers yearly. Flix is operational in 36 countries outside the U.S. and active in over 2,500 destinations and is working across 400,000 connections every day. Experts say that Flix acquisition of Greyhound is not because it wants to expand its network. Experts are convinced that it is all about presence and having a huge chunk of the market and what better and easier way to do it than with Greyhound Lines? Greyhound is already a household name and Flix stands to gain a lot by acquiring it.
“The continuous expansion of our services through partnerships and acquisitions has always been an integral part of our growth strategy to build our global presence. The acquisition of Greyhound is a major step forward in the US. The FlixBus and Greyhound teams share a common vision to make smart, affordable and sustainable mobility accessible to all”, Jochen Engert, FlixMobility’s co-founder and co-CEO said in a statement.
Co-founder and co-CEO André Schwämmlein also added in the statement that “consumers across North America are increasingly seeking affordable, comfortable, smart and sustainable mobility solutions. A compelling offering will draw significantly more travellers away from private cars to shared coach mobility. Together, FlixBus and Greyhound will be better able to meet this increased demand. As our business continues to recover from the effects of the pandemic, we will replicate the success that we have already achieved in 36 countries outside of the US with our innovative and customer-centric approach”.
The acquisition of Greyhound Lines by Flix promises to be one of the best investments that the company will ever make.