Arriva develops its growing presence in Madrid

Leading European passenger transport group Arriva plc todaysignificantly increased its position in the growing Madridtransport market, with the acquisition of Empresa de Blas y CiaS.L. (De Blas) and its subsidiaries and investments for Euro 99.25million (£78.6 million). 80 per cent (Euro 79.4 million) waspaid in cash drawn on Arriva’s existing resources at closingand the balance (Euro 19.85 million) has been placed on deposit assecurity for any claims against the sellers, but is otherwisepayable over the next 5 years*.

De Blas, owned by the Gomez and De Blas families, is one of thelargest privately owned contractors to the Madrid transportauthority. With 222 buses and 679 employees, it operates 34inter-urban routes into and around the city. Substantial depotfacilities to the south-west of Madrid provide significant scopefor further expansion. 

In 2007, its revenue was Euro 48.8 million (£38.6million), and profit before tax was Euro 3.5 million (£2.8million). Gross assets at 31 December 2007 were Euro 34.2 million(£27.1 million), and net assets were Euro 11.4 million(£9.0 million) including net debt of Euro 15.3 million(£12.1 million). The acquisition is expected to be earningsenhancing before goodwill impairment, intangible asset amortisationand exceptional items.

The wholly owned subsidiaries of De Blas are Greisi S.L. andServicios Integrales Bus & Truck S.A., which provide servicingand maintenance functions for the De Blas operations and thirdparties. De Blas also has a 30 per cent stake in Intercambiador deTransportes Principie Pio, a newly-constructed transport hub forbuses, metro services and overland trains in the south-west ofcentral Madrid, which started operating in May 2007, with a 33-yearconcession, and passenger numbers estimated at 20 million in itsfirst full year.

David Martin, chief executive of Arriva plc, said: "This is animportant step forward in positioning Arriva for the development ofone of Europe’s most exciting city markets for passengertransport. Madrid’s rapidly growing population provides abackdrop of strong demand, and the transport authority’ssignificant investments in services and infrastructure are helpingto create the potential for world-class public transport in andaround the city.

"De Blas is an established, professionally-managed business witha young fleet. Building on Arriva’s existing presence inMadrid, it gives us a strong foundation for long-term growth,enhancing Arriva’s ability to flourish in this thrivingmarket. Long concessions give considerable visibility into earningsin the medium term, and the business has great potential. We lookforward to working with the management team at De Blas to developand grow our operations further, and benefit from the expandingtransport market in the city.”

*5 per cent of the purchase price becomes payable in the first andsecond years and approximately 3 per cent per annum for each of theremaining three years.

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Notes to Editors:

Arriva will host an audio conference for analysts and investorstoday at 9am London time. Please contact Tulchan Communications(020 7353 4200) for information.

Arriva is one of the largest transport services organisations inEurope, with operations in 10 countries: the Czech Republic,Denmark, Germany, Italy, the Netherlands, Poland, Portugal, Spain,Sweden and the United Kingdom. With some 40,000 employees,including share of associate companies, Arriva provides more thanone billion passenger journeys every year through an extensiverange of public transport services, including buses, trains,commuter coaches, airside transport and water buses. In the UK, thegroup is also engaged in bus and coach distribution.

Arriva’s existing operations in Madrid include more than100 employees operating 42 buses following the acquisitions of itsEsfera and Fray Escoba businesses in 2007. Elsewhere in Spain,Arriva operates bus services in Galicia (Arriva Noroeste), Mallorca(Autocares Mallorca and Bus Nord).