Marcopolo Buys Control of Aussie Busmaker

Brazilian bus body maker Marcopolo has acquired a 75% stake in its Australian counterpart Volgren Australia for AUD52.5m ($52.9m), with additional future earn-out adjustments. The Grenda family that founded Volgren will hold a minority stake in the business, but Marcopolo will retain an option to purchase the remaining 25% stake in 3 years time, the companies announced in separate statements. In addition to the purchase price, the deal between the bus makers includes an earn-out clause with an Ebitda floor for each of the following three years, Carlos Zignani, Marcopolo’s investor relations director tells LatinFinance. If the end year Ebitda exceeds the agreed upon floor, a multiple of 6x the excess will be multiplied by the 25% remaining stake and added to the AUD52.5m purchase price. In addition to the earn-out, the deal includes an option for Marcopolo to purchase the remaining 25% stake in the company at a multiple of 6x Ebitda, with an exercise date of June 2016. At that time, the value of the stake will be determined based on the average Ebitda of the previous 3 years. Based on Marcopolo’s estimates, the purchase price for the company came in at a multiple of 2.5x 2010 Ebitda of AUD21m. The transaction will be financed with AUD22.5m in cash and an additional AUD30m in debt, to be borrowed at a rate of anywhere between 6% to 7% from a yet-to-be-determined Australian bank, Zignani added. Volgren was advised by UBS, consulting firm MGI Melbourne and Australian law firm Arnold Bloch Leibler. Marcopolo retained PricewaterhouseCoopers to advise on the acquisition. The deal comes shortly after Petros, the Petrobras employee pension fund, announced it had increased its position in Marcopolo to 15% of preferred shares, or 9.29% of the company’s total capital.