Stagecoach Group

Companies

Description

Stagecoach Group is a transport group based in Perth, Scotland. It operates buses, express coaches and a tram service in the United Kingdom.

History

Stagecoach was born out of deregulation of the British express coach market in the early 1980s, though its roots can be traced back to 1976 when Ann Gloag and her husband Robin Gloag set up a small recreational vehicle and minibus hire business called Gloagtrotter in Perth, Scotland. Ann's brother, Brian Souter, an accountant, joined the firm and expanded the business into bus hire. In 1982, with the collapse of his marriage to Ann, Robin Gloag sold his ownership stake in the business and ceased any involvement. The Transport Act 1980, which freed express services of 35 miles and over from regulation by the Traffic Commissioner, brought new opportunities for the company and services were launched from Dundee to London using second-hand Neoplan coaches. For a while, the company offered a very personal service with Brian Souter doing the driving and Ann Gloag making up sandwiches and snacks for the passengers.

Successfully competing against the then state-owned National Express Coaches and Scottish Citylink, the company grew significantly between 1981 and 1985, when Stagecoach entered local bus operation with the acquisition of McLennan of Spittalfield, near Perth. Its early success allowed Stagecoach to take advantage of the privatisation of the national bus groups. Several firms were purchased from London Regional Transport, the National Bus Company, Scottish Bus Group and various city councils. The company consolidated its operations during the 1990s by purchasing ex NBC and SBG bus companies that had been purchased via management buyouts and employee-owned corporations when privatised. Stagecoach left the long-distance express coach market in 1988 when it sold its operations to National Express.

During the privatisation of British Rail, Porterbrook was formed as one of three rolling stock companies owning around a third of passenger railway locomotives, multiple units and coaching stock running on Network Rail's system which is leased to various train operators. It was sold to a management buyout before being purchased by Stagecoach in August 1996. In April 2000 Stagecoach sold Porterbrook to Abbey National for £773 million.

In 1997, Stagecoach won the franchise to operate the Sheffield Supertram system, from the South Yorkshire Passenger Transport Executive, who own the system. Stagecoach bought the remaining 27 years of a 30-year franchise, which expires in 2024, and run the operation under the Stagecoach Supertram brand, having responsibility for the operation and maintenance of the tram system. When Stagecoach took over the system, it was struggling, both financially and in terms of attracting passengers, but it is now an extremely popular and successful operation. Stagecoach took another turn in 1998, when it purchased Scotland's Prestwick Airport for £41 million. By the summer of 1999, the company was rumoured to have been offered some £80 million for Prestwick. They sold the airport in January 2001 to concentrate on surface transport.

On 21 November 2005, Stagecoach announced the sale of its New Zealand operations to Infratil. On 14 December 2005 Stagecoach purchased Barnsley based Traction Group (Yorkshire Traction) for £26 million, and also assume Traction's £11 million debt. Traction operated 840 buses in South and West Yorkshire (Yorkshire Traction, Barnsley & District, Yorkshire Terrier), Lincolnshire (RoadCar) and Angus (Strathtay Scottish). Traction was the largest remaining privately owned independent bus operator in the UK.

Following the sale of its London bus operations to Macquarie Bank in 2006, Stagecoach UK Bus concentrated on the bus market outside the UK capital, focusing on organic growth and exploring acquisition options. In September 2005, following competition with its Megabus coach operation, Stagecoach launched a joint venture with Scottish Citylink coaches. After a competition enquiry, in October 2006 Stagecoach was instructed to sell some of the Scottish coach services. Stagecoach were also active in the rail industry, having a 49% stake in Virgin Rail Group. In 2007 the group were successful in their bid for the new East Midlands franchise which had been created by amalgamating the previous Midland Mainline franchise with the eastern part of the former Central Trains franchise.

In July 2007, Stagecoach commenced operating the Manchester Metrolink tram network. In January 2009, Stagecoach bought Preston Bus, a former rival in the Lancashire area. In November 2009 the Competition Commission ordered Stagecoach to sell Preston Bus after it had adversely affected competition in the area.

In October 2010, Stagecoach expanded further by re-acquiring East London and Selkent, Stagecoach's former London bus operations. In August 2011, Stagecoach sold its Manchester Metrolink concession to RATP Group halfway through its ten-year contract to operate the network. In December 2013, Stagecoach bought King's Lynn based Norfolk Green. In March 2015, Virgin Trains East Coast, in which Stagecoach held a 90% shareholding, commenced operating the InterCity East Coast franchise. The franchise was terminated on 23 June 2018 after it was revealed that Stagecoach had overbid.

In December 2018, it was announced that private equity house, Variant would acquire Stagecoach Group's US division for $271 million. The sale was completed in April 2019.

In April 2019, Stagecoach was disqualified from participating in three rail franchise competitions by the Department for Transport after it submitted non-compliant bids for the East Midlands, South Eastern and West Coast Partnership franchises.

In September 2021, National Express entered into talks to acquire Stagecoach Group. In December 2021, a deal was agreed between the boards of the two companies: however, it was subject to both shareholder approval and regulatory scrutiny. To satisfy the Competition & Markets Authority, Stagecoach sold Megabus, its 35% shareholding in Scottish Citylink and the Falcon Coaches part of Stagecoach South West to ComfortDelGro. Having originally recommended shareholders accept the National Express offer, in March 2022 the board of directors withdrew the recommendation in favour of a takeover offer from a DWS managed investment fund.

On May 2022, it was announce that Stagecoach would purchase Tower Transit's Lea Interchange garage in London. The acquisition was finalised on 25 June 2022 and these services are now operated by Stagecoach under the Lea Interchange Bus Company Limited legal entity. In August 2022, HCT Group fell in administration and entered into negotiation with the Stagecoach London to sell its 160-vehicle operation, following a period of ongoing financial difficulties for the HCT Group.

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