ADL’S acquisition of Custom Coaches

ADL’s CEO Colin Robertson pictured centre right with the previous Custom owners CEO Mark Burgess, CFO Paul Burgess and Director Chris Absalom

 

 

 

 

 

 

 

 

 

 

 

Custom Coaches was acquired today by Alexander Dennis Limited (ADL) with the pledge that the British company will “invest in people, processes and products” as it bids to “turn a successful brand into a GREAT Australian business.”

The pledge came from Colin Robertson, Chief Executive of ADL, Britain’s biggest bus and coach manufacturer and a company that in recent years has emerged as one of the world’s fastest-growing bus builders, now with manufacturing operations and build partnerships in the UK, mainland Europe, Hong Kong, China, the USA, Canada, New Zealand and Australia.

The multi-million deal sees ADL take 100% control of the Australian business, which employs over 400 people at manufacturing sites in Sydney, New South Wales, and in Adelaide, South Australia.

Custom, which also has parts and service centres in Sydney, Melbourne, Adelaide and the Gold Coast, currently has annual sales of around $90m and is one of the largest bus body builders in Australia with a 24% share of the market.

Signing the acquisition deal today, Robertson said: “This is another significant step in our strategy to diversify and grow the business. It will see our group turnover increase to around A$850 million per annum – a three-fold multiple in just five years – and position us well to become a major player in the southern hemisphere.

“The Custom brand is an icon in the Australian bus body market having been part of the transport landscape for 50 years. It has history, heritage and a reputation for quality products and putting customers first. These are the fundamentals of our business philosophy at ADL and we will build on them as we bid to turn a successful brand into a great Australian business.

“Our strategy will be to invest in people, processes and products; to exploit the synergies between our companies, particularly in terms of product and technology transfer, and to further strengthen the reputation we have elsewhere in the world for best-in-class customer support.

“This is the beginning of an exciting new chapter for both Custom and ADL. It will build on the progress ADL has made in New Zealand in the last two years where our manufacturing partnership with Kiwi Bus has established us as market leader and a major supplier to cities such as Auckland and Wellington.”

Mark Burgess, Managing Director of Custom, said: “Becoming part of the ADL family simply makes sense. We have revitalized our Custom product range with the introduction of the CB80 city bus and the SB50 school bus in the last year but the bringing together of Custom and ADL will open up a whole new raft of opportunities.

“There are clear synergies between the two companies. Custom is well established with state governments in Australia, corporate bus clients and family-run operations. We know the market intimately, while ADL is a recognized world leader in light-weight, fuel efficient vehicles, particularly midi buses and double decks. It is also admired globally for its focus on customer support. Bringing these strengths together presents the opportunity to create a powerful new force in the Australian bus manufacturing sector.”

Background on Custom

Custom is one of the most established and successful bus body builders in Australia, having produced its first vehicle in 1955. It designs and manufactures light-weight, stainless steel bodies for low floor city, school and midi buses, all of which are designed for a 25-year life-cycle. Custom’s focus on product innovation, coupled with meticulous research and development has kept it at the forefront of the Australian market for over 50 years, producing a raft of sophisticated specialist vehicles in recent years such as articulated, CNG powered and hybrid-electric buses, along with a unique range of low floor buses incorporating under-floor luggage space.

It has manufacturing facilities in Sydney and Adelaide and a series of aftermarket operations located strategically across the country.

Background on Alexander Dennis Limited

Alexander Dennis is Britain’s biggest bus and coach manufacturers with build partnerships and business alliances around the world. It has emerged in the past five years as one of the fastest growing manufacturers in the global bus and coach sector.

ADL is an acknowledged world leader in the design and manufacture of fuel efficient, environment-friendly single and double deck buses. It is also Europe’s leading supplier of low carbon hybrid-electric buses. ADL midi buses are global best-sellers, as are its double decks, which form the backbone of fleets in London, Hong Kong, Vancouver, Ottawa, Toronto, New York, Las Vegas, San Francisco and Seattle.

North America JV

Just weeks ago (May 7) ADL announced details of a strategic alliance with New Flyer Industries Inc, North America’s leading manufacturer of heavy-duty transit buses. Together, the businesses intend to bring a new dimension to the passenger transport industry in the USA and Canada.

As part of a contractual Joint Venture (JV) the companies plan to target the medium-duty, low-floor bus sector in North America and to transform the segment with a range of light-weight, fuel efficient products based on ADL’s midi bus range.

Colin Robertson said at the time: “Transit authorities in North America are being squeezed on all fronts as the economy tightens and the impact of the recession continues relentlessly. Our Enviro200 midi bus is a world-beater, leading the field in markets as far apart as Britain and New Zealand. It is light-weight, highly manoeuvrable, enjoys unrivalled fuel efficiency and has incomparable whole life costs. We believe there is potential for 1,000 a year in the USA and Canada.”

Advisers

ADL was advised during the Custom acquisition by PWC Australia and Clayton Utz.

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This entry was posted in Custom News.