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Kinetic Group, one of the largest non-government-owned bus operators across Australia, New Zealand and the United Kingdom, has made a pit stop in the debt markets on the way to its final destination – a capital partner search. |
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Street Talk understands Kinetic has finalised a $1.6 billion refinancing, spread across three-year and five-year facilities, and Australian dollar and NZ dollar tranches. |
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The deal had a strong turnout, with 21 lenders writing cheques across banks and institutional investors. Macquarie Capital led the refinancing as the debt adviser. |
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Of note, Kinetic will bid farewell to more expensive, leveraged buyout-style debt in lieu of an infrastructure-style deal that would lower the group’s financing costs. |
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That ties in well with Kinetic’s looming capital partner search, which is expected to be targeted at core-plus infrastructure investors. OPTrust and co-owner Foresight Group have mandated Macquarie for the review, as revealed by this column in January. |
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Kinetic has more than 5000 buses in Australia and New Zealand including the airport-to-city SkyBus routes, and last year added rail networks in Britain and Norway via the Go-Ahead acquisition. |
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It is expected to be pitched as a geographically and operationally diverse platform, supported by long-term contracts with high-quality government and infrastructure counterparties. In particular, potential buyers have pointed to the company’s exposure to critical public infrastructure, delivering high barriers to entry and defensive earnings. |
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The business is estimated to be worth more than $4 billion, thanks to nearly $1 billion in annual revenue of which about 82 per cent came from long-term, inflation-linked government contracts as of mid-2022. That’s before it acquired the stake in Go-Ahead alongside Spanish peer Globalvia. |
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OPTrust has been an investor at Kinetic since 2014, when it teamed up with private equity group Catalyst Direct Capital Management to buy Melbourne’s SkyBus. |
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Read the full story tomorrow and more on the Street Talk page. |
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Matt Tripp’s Betr is poised to make its way onto the ASX and is preparing to sign an all-scrip merger deal with Michael Sullivan’s BlueBet. BlueBet, which has a market capitalisation of $50 million, has been advised by Ord Minnett while Betr engaged Barrenjoey for this transaction. |
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