Formerly known as SeaLink Travel Group, Australian public transport service group Kelsian Group [ASX:KLS] announced that it has acquired ‘All Aboard America!’ Holdings — a leading provider of passenger motorcoach services to corporate, government, education, LNG, and tourism sector customers in the US.
The KLS share price had increased by 1.5% in the early afternoon on Friday, and the stock was changing hands for around $6.82 each.
While the boats and bussing tourism stock has had a good run more recently (having increased by 20% in the share price in 2023 so far), it has slid by 10% over the past full year.
In its sector, it is down by 13% and compared to the broader S&P index, the KLS share price is down by 9%:
Source: TradingView
Kelsian secures American tourism group ‘All Aboard America!’
Today, Kelsian has reported the completion of a new acquisition — American group AAAHI, a sale that represents an enterprise worth $US325 million (AU$487 million).
The move to acquire the US tour company was first announced back in March. By May, the partners entered into a binding purchase agreement for KLS to acquire 100% of AAAHI — a leading provider of passenger motorcoach services for various sectors and customers in the US.
Kelsian’s Group Chief Executive Officer, Clint Feuerherdt, commented on the fully executed acquisition earlier today:
‘I am very pleased to announce the successful completion of the AAAHI acquisition. Since announcing the acquisition in March 2023, the business continues to perform very well and there is a strong pipeline of new business opportunities.
‘Since announcing the acquisition, I have continued to work closely with the management team and remain very confident about the future of both businesses working together. Like Kelsian, AAAHI is a customer-centric operator with an excellent reputation and track record of delivering high quality contract and charter services. Combined with our operational expertise and capabilities, this opportunity will form a solid foundation for growth in the large and attractive USA market.
‘The Kelsian and AAAHI businesses are highly complementary; our operating portfolios span across multiple locations in the transport and tourism sectors; and we both share the same commitment to maintaining high safety standards for our employees and our customers.’
AAAHI is the fourth-largest motorcoach operator in the US with 1000-plus vehicles and 1500-plus team members operating in California, Arizona, New Mexico, Texas, Colorado, Louisiana and Mississippi.
It’s made up of several of its own brand acquisitions, such as generational family businesses like Hotard Coaches, Sun Diego Charter Company, Ace Express Coaches, Lux Bus America and First Class Transportation. AAAHI serves a range of charter operations including university and professional athletics, military travel, corporate partners, tour operators and K-12 schools.
At Kelsian’s 2023 Macquarie Australia investor presentation last month, the group reported it had $1.2 billion in annualised contracted revenues and earned $678.3 million in the first half of the financial year alone.
Kelsian has an underlying EBIT in the first half of $44.9 million — a 17.8% growth in earnings on the previous period — and hit $29.5 million in underlying NPAT.
These financials, the business believes, lend it enough strength to support its most recent acquisition funding, and to continue renewing its current fleet of assets for the fiscal year.
Australia’s evolving economy
Australian trade isn’t what it once was. Think of the raised costs, tight supplies, closing banks, and shrinking packaging.
The change is all around us, but what is it all pointing to?
Financial and geopolitical analyst, Jim Rickards, has pieced certain puzzle pieces together.
He’s learned all about the patterns and says getting ready for change could put you ahead of the curve and protect your wealth.
If you want to know more about the biggest geoeconomic shift of our lifetime, click here.
Regards,
Mahlia Stewart,
For Money Morning
