What’s the deal?

The acquisition by FirstGroup of bus operator RATP Dev Transit London from French company RATP Développement. FirstGroup is a FTSE 250 London-listed transport company headquartered in Aberdeen and it provides around 20% of the UK population with local bus services. Last year, its turnover was £4.7bn. This deal was a strategic acquisition by First Bus – FirstGroup’s bus division – marking its entrance into bus operations in London and helping strengthen its position as a leading provider of sustainable bus operations in the UK and Ireland. RATP, which since its acquisition is operating as First Bus London, is very prominent in the London bus market, providing 180 million passenger trips annually across 90 routes on behalf of Transport for London (TfL). It has a fleet of around 1,000 buses and roughly 3,700 employees.

How were you introduced to the deal?

FirstGroup has been a client of Burges Salmon for more than 30 years, so we’ve been involved in a number of milestone transactions. We have witnessed first-hand its growth trajectory over this period. Our longstanding relationship meant we knew what mattered to the FirstGroup team and how they liked to work, and we could draw upon expertise across our transport sector group. This deal followed on from a number of transactions for FirstGroup during 2024, so their team has spent a lot of time with us over the past 12 months.

What were the timescales?

The deal took just over six months from initial offer to completion, with a two-month gap required between signing and completion in order to obtain French government approval and TfL’s consent to the change of control of RATP Dev Transit London. 

How was the deal structured?

FirstGroup acquired 100% of the shares in RATP Dev Transit London and its subsidiaries for cash. This was paid in full on completion, subject to a post-completion true-up mechanism. The deal was financed by FirstGroup from its existing cash resources and the assumption of RATP’s asset-backed vehicle finance leases.

Who were the advisers?

We were buy-side legal advisers to FirstGroup. Royal Bank of Canada provided buy-side financial advice and tax advice came from FirstGroup’s in-house team. Hogan Lovells acted as sell-side legal advisers to RATP; and Cantor led the sale process for RATP. 

What were the challenges?

With buses running across London 24/7, a seamless handover was key. Meticulous planning was required from both FirstGroup and RATP management to ensure there was no impact on operations as branding and systems were switched over on completion. 

A number of stakeholders were involved, including the French government, TfL and vehicle lessors, as well as RATP employees and FirstGroup’s shareholders, so a clear communication plan was needed to ensure alignment on timings and announcements. Given FirstGroup’s listed status, this was particularly important. 

What were the lessons learned?

Good preparation for an M&A deal is always key, but inevitably unexpected issues arose during the deal process, given the nature of the business being acquired. Having the benefit of a good collaborative working relationship between both client and advisers, as well as a good understanding of the sector, was crucial in ensuring that issues were resolved pragmatically.