NFI Group Inc. acquired Alexander Dennis Limited (ADL) for a total transaction value of approximately $405 million on a cash-free, debt-free basis, subject to certain adjustments.
In 2018, ADL generated annual consolidated revenue of $843 million, from delivering 2,533 buses. During 2018, approximately 49% of ADL’s consolidated revenue was generated from the UK, 27% from Asia Pacific markets, and 12% from North America, with the remaining 12% coming from aftermarket and developing markets. From 2010 to 2018, ADL achieved a compound annual revenue growth rate of 10.5%.
“This is a transformational acquisition for NFI to become a global bus manufacturer,” said NFI’s President/CEO Paul Soubry. “We’re thrilled to have ADL join the NFI family in a transaction that we believe will drive our business forward by combining joint strengths in engineering, sales, new product development, and manufacturing with NFI’s expertise in operational excellence, insourcing, fabrication, and systems management.”
NFI has entered into an agreement with Colin Robertson, ADL’s CEO, and Michael Stewart, ADL’s CFO, to continue leading ADL. They will also be tasked with leading NFI’s international growth ambitions. ADL’s primary shareholders along with Robertson and Stewart have elected to roll approximately 10% of their transaction consideration into NFI shares, ensuring strong ongoing alignment with NFI’s existing shareholders.
NFI and ADL previously worked together for the production and sale of the MiDi bus, which was based on ADL’s E200 design sold throughout the world.
According to the company, the transaction presents a number of attractive opportunities for NFI, including:
- Market Leadership, International Diversification, and a Growth Platform for NFI: ADL is the number one global producer of double-deck buses with an established presence across multiple continents, over 50% market share in the UK, and a growing presence in continental Europe, Asia Pacific, and North America. ADL’s recent contract win in Berlin provides a platform for further European expansion while its existing presence in Mexico establishes a model for further Latin American growth.
- Enhanced Product Portfolio: ADL adds to NFI’s product portfolio through its class leading, internationally proven line-up of single and double deck buses, and motor coaches. ADL enhances NFI’s technical competencies on lightweight chassis and bodies. NFI’s electric vehicle (EV) experience will enhance ADL’s international EV offering and ensure both companies drive the future of clean transportation. The combined NFI and ADL business creates the strongest customer offering in North America with the widest range of buses and unrivalled aftermarket support.
- Cost Effective Platform: ADL’s flexible operating model enables the business to enhance competitiveness in existing markets while entering new regions. ADL successfully operates in highly competitive markets through its ability to effectively and efficiently develop innovative new products, leverage local sourcing, create flexible assembly partnerships, and establish dedicated aftermarket service.
- Strong Cultural Fit with Commitment to Safety and the Environment: Through NFI’s longstanding dialogue and prior joint venture with ADL, it became clear that the two companies shared similar cultures and values regarding quality and customer experience. Further, there is a clear alignment with management strategy, market outlook, and EV adoption expectations which should allow for a smooth transition. ADL’s management team remains in place to drive performance and international growth.