Bus business goes private

Tividale-based Rotala Group, which operates Diamond Bus in the West Midlands, has used a £21.1 million funding package from the bank to de-list from the AIM stock exchange, enabling the business to streamline its management and achieve its ambitious growth targets.

Rotala has been taken private through a combination of rolled over equity from key management and investors, as well as HSBC UK facilities.

The bank worked with partners including legal advisory firm Mills and Reeves, with BDO conducting financial due diligence to ensure success of the agreement.

The group is now owned by the existing chief executive of Rotala Simon Dunn, executive director Bob Dunn and non-executive chairman John Gunn, together with their spouses and other personal interests.

HSBC UK has also allocated a further £14m to enable the business to operate services for recently acquired franchises in Greater Manchester. Rotala plans to use this funding to acquire 67 new buses for these acquisitions, in line with their investment plans for the regions transport network.

Rotala’s growth plans involve extensive acquisition and organic growth activity, including bidding for transport franchises in the West Midlands and Greater Manchester, optimising vital routes for passengers.

Simon Dunn said: This move will enable us to focus on long-term growth, with our experienced and dynamic team leading Rotala towards our future growth plans and commitment to developing sustainable revenue streams.”

Andy Oates, head of corporate banking at HSBC UK, added: “I’m pleased that we’ve been able to support Rotala’s management team with this important milestone in its development putting the business in a great place to achieve its full potential as an innovative and growing transport business.”

Rotala, which was formed in 2005, provides commercial and subsidised bus routes for businesses, local authorities, the public and private individuals. The business has grown through the acquisition and amalgamation of local coach and bus operations, and now operates more than 500 vehicles and employs more than 1,500.