Melbourne-based P2P Transport has announced plans to acquire Black & White Cabs, which has operations in Western Australia, in a cash and scrip deal worth $8.1 million.
Melbourne-based P2P Transport has announced plans to acquire Black & White Cabs (BWC), which has operations in Western Australia, in a cash and scrip deal worth $8.1 million.
BWC, which operates in WA and Queensland, was established in Brisbane in 1936 and has about 1,400 vehicles within its network.
It is expected to contribute underlying earnings of $3.5 million in the 2019 financial year.
The acquisition brings the total number of vehicles on the P2P platform to 2,500 with operations in Brisbane, Toowoomba, Gold Coast, Sydney, Melbourne and Perth.
P2P said the acquisition provided a beach-head for expansion into WA and represented an enlarged potential market for the roll-out of Adflow Digital, its taxi rooftop advertising platform.
P2P is a fleet management business focussed on the provision of vehicles on a rental basis to independent professional drivers operating in the point-to-point passenger transport industry.
Under the deal, P2P will pay $4 million in cash and $4.1 million in shares.
There is the potential for a contingent consideration of up to $12 million, based on future financial performance.
BWC’s dispatch technology and passenger booking app will be rolled out into P2P’s existing fleet.
“This is a significant milestone for P2P positioning the business to become Australia’s leading vertically integrated passenger transport fleet manager,” P2P managing director Tom Varga said.
“It marks an important step in the Australian market’s transition from the slow and cumbersome legacy technology and platforms that have operated for decades and gives P2P a technology enabled platform that delivers innovation, improved service and a sustainable competitive advantage.”
Following completion of the acquisition, BWC managing director Greg Webb will join the P2P board.
The acquisition comes eight years after Perth's largest taxi company, Swan Taxis, was bought by Singapore listed ComfortDelGro.
Shares in P2P finished up 6.5 per cent at $1.38 each.