Staff set for windfall after Stagecoach deal Greg Wright Deputy Business Editor BRITAIN'S largest privately owned bus company has been taken over in a £26m deal.
The Traction Group, based in Barnsley, South Yorkshire, has been acquired by the Stagecoach Group.
The deal will lead to a multi-million pound windfall for Frank Carter, who led a management buyout at Traction 18 years ago, his family and some of the company's 2,000 staff.
Traction dates back to 1902, when it operated trams around the Barnsley area. Today, it's the sixth largest bus company in Britain, with operations in South and West Yorkshire, Lincolnshire and Tayside in Scotland.
Bus companies owned by the group include Yorkshire Traction, Barnsley and District, Yorkshire Terrier, Lincolnshire Road Car and Strathtay Transport of Dundee.
Under the terms of the acquisition, Stagecoach paid 26m, of which 21.5m was in cash, and assumed Traction's net debt of around 11m. The principal vendors are Mr Carter, who stepped down as chairman and managing director on completion of the deal, two trusts in favour of members of Mr Carter's family and a Traction employee share ownership trust.
Neither Stagecoach nor Traction would disclose how the 26m would be divided between Mr Carter and the rest of the vendors.
In its financial year ended December 31 2004, Traction reported turnover of 56.6m, operating profit of 2.5m and gross assets of 50.5m.
Brian Souter, chief executive of Stagecoach Group, based in Perth, Scotland, said: "The acquisition of Traction is consistent with our strategy for growth in our core UK and North American markets, and follows the acquisition of Glenvale Transport earlier this year.
"Traction is the largest of the remaining privately-owned UK bus operators. We are excited by the prospects of acquiring Traction, and believe we can add value through innovation, investment and by applying Stagecoach's operational expertise.
Stagecoach's investment in improved services and initiatives – including Kickstart, sector-leading telemarketing campaigns and online sales – is seeing large numbers of people return to the nation's buses and demonstrates our ability to deliver impressive growth."
All Traction Group's staff will be retained following the takeover.
Stagecoach already operates around 7,000 buses in nearly 100 towns and cities. Hull-born Mr Carter started his career in 1954 as an apprentice at the city's East Yorkshire Motor Services, stripping down buses. An only child, he grew up in a musical family.
His mother was a pianist and well-known in East Yorkshire's dancehalls during the 1930s with her 12-piece band The Gussie Beale Orchestra. She got together with his father, a coronet and banjo player, by recruiting him to the band.
ON THE BUSES
The Traction Group has its roots in a tram fleet which operated in Edwardian Barnsley.
After the First World War these were replaced by buses and gradually the company expanded into surrounding areas.
n In 1969 Yorkshire Traction became part of the state-owned National Bus Company that was privatised in 1987 when the company was bought by its then directors, led by Frank Carter.
The acquisition of other companies has occurred since privatisation.
Traction is now the UK's sixth largest bus operator with more than 2,000 staff.
Before the acquisition, it was the largest bus operator in Britain not listed on the stock market.
As well as running buses and coaches, Yorkshire Traction owns and operates a regional chain of travel agencies trading under the Travelink name.
During his 50-year career, Mr Carter has worked as chief engineer with Lincolnshire Road Car, and as managing director of Yorkshire Traction.