LONDON: Mobico has reached an agreement to sell its North America School Bus business to global infrastructure investment firm I Squared Capital for an enterprise value of up to $608 million, the company announced Tuesday.
The transaction, expected to close in the third quarter of 2025, follows Mobico’s strategic review of its School Bus operations, which began in October 2023. The sale will allow Mobico to reallocate resources from the capital-intensive School Bus division to focus on deleveraging and growth opportunities in other areas, particularly its ALSA business.
The deal includes an earn-out of up to $70 million contingent on future performance conditions. Mobico anticipates receiving net upfront proceeds of between $365 million and $385 million, helping to strengthen its balance sheet. The company has also reported a reduction in net debt following the removal of IFRS 16 leases tied to the School Bus division.
The move comes after efforts to improve School Bus operations post-pandemic, including driver recruitment, contract renegotiations, and pricing adjustments. However, the business has continued to face challenges such as wage inflation and rising fleet costs.
Mobico CEO Ignacio Garat called the sale “a significant milestone” and said it would enable the company to “continue deleveraging while investing in growth opportunities.” School Bus CEO Tim Wertner welcomed the acquisition, highlighting the improvements made under his leadership since 2023. I Squared’s Global Chief Investment Officer Gautam Bhandari emphasized the company’s commitment to supporting the future growth of school transportation services.
Mobico is expected to publish its full-year results for 2024 on April 29.