Good evening,

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.

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.

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.

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.

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.

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.

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.

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.

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.

Read the full story tomorrow and more on the Street Talk page.

• Friend or foe: Lendlease may be Wylie’s white knight in Sydney CBD
• Betr, BlueBet poised to strike merger deal in major wagering shake-up
• Melbourne firm seeks backers to convert ocean waves to electricity
• Jarden Australia MD heads to JPMorgan
• FIRB questions linger in Azure Minerals takeover
• Dubber presses play on $24 million emergency raise; 77 per cent discount

• Publican Jon Adgemis’ luxury yacht not safe from creditors
• Chalmers’ merger crackdown to shake up M&A
• Macquarie shreds valuation of troubled Indian tech investment

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.

Click here for the latest equity market wrap.