6 ms·

> for an enterprise value on a debt-free / cash-free basis of c.$46m plus unconditional deferred consideration of $32m with an interest rate of 5% per annum In

> for an enterprise value on a debt-free / cash-free basis of c.$46m plus unconditional deferred consideration of $32m with an interest rate of 5% per annum In SV terms that's what? A round B series? Sure, maybe the debts are substantial, but that seems like it was cheap.

mschuster91 5y ago
Unlike a railroad, there isn't much in terms of assets in a bus service sans the paper value of the brand itself and (where applicable) route licenses. Old buses are long-since written off, new buses are usually leased. Further driving down the value (which does seem to be cheap given that GH made 54M profit out of 914M revenue) are long-term obligations: lease agreements that may be expensive to break, employment contracts for the drivers and operating costs (fuel, road tolls) that have to be paid even if a bus line isn't operating at capacity (or, as with corona crisis, at all).
- fabioborellini 5y ago
  I need to add that virtually no railroad operating companies own any railroads in Europe - even the private operators use public infrastructure. That is the case for Flixmobility’s Flixtrain as well.
  - hef19898 5y ago
    DB is owning all German railroads. They operate the vast majority of trains. They do share their network with competitors, e.g. FlixTrain. Not sure, but I do think SNCF in France is also owning French railroads.
- SilasX 5y ago
  Fuel and road tolls don’t have to be paid if the bus line isn’t operating at all.
  - deleted 5y ago
    [deleted]
ISL 5y ago
It probably is cheap, but one would have to sustain the network until the pandemic eases. Greyhound seems like the kind of iconic US company that would pique the interest of Berkshire Hathaway -- it is telling that BH didn't pick it up.
- brummm 5y ago
  Hasn't been American in a while, though. It's been British owned for at least a decade before this recent purchase.
- LurkingPenguin 5y ago
  Greyhound absolutely fails most of Berkshire's criteria, and the size of the deal ($78 million) is well under the deal size Berkshire is looking for. As for being "iconic", I'm not sure "iconic" is the word I'd use to describe Greyhound. It has a reputation for sure, but not a good one.
  - quesera 5y ago
    FWIW, my instantaneous reaction on seeing the title of this post was "wait, isn't Greyhound a special entity designated by US govt, like Amtrak or the USPS?". I knew it couldn't be correct after half a second of reflection, but it's a measure of how "iconic" Greyhound is. Also, they have big real estate (often in beautiful old buildings) in the center of the big cities, and their branding is red white & blue. It seems likely that they don't own the real estate, and maybe the cities own the bus stations which only appear to be operated by Greyhound. I have only been inside about half a dozen bus stations though.

mschuster91 5y ago

Unlike a railroad, there isn't much in terms of assets in a bus service sans the paper value of the brand itself and (where applicable) route licenses. Old buses are long-since written off, new buses are usually leased. Further driving down the value (which does seem to be cheap given that GH made 54M profit out of 914M revenue) are long-term obligations: lease agreements that may be expensive to break, employment contracts for the drivers and operating costs (fuel, road tolls) that have to be paid even if a bus line isn't operating at capacity (or, as with corona crisis, at all).

fabioborellini 5y ago
I need to add that virtually no railroad operating companies own any railroads in Europe - even the private operators use public infrastructure. That is the case for Flixmobility’s Flixtrain as well.
- hef19898 5y ago
  DB is owning all German railroads. They operate the vast majority of trains. They do share their network with competitors, e.g. FlixTrain. Not sure, but I do think SNCF in France is also owning French railroads.
SilasX 5y ago
Fuel and road tolls don’t have to be paid if the bus line isn’t operating at all.
- deleted 5y ago
  [deleted]

ISL 5y ago

It probably is cheap, but one would have to sustain the network until the pandemic eases. Greyhound seems like the kind of iconic US company that would pique the interest of Berkshire Hathaway -- it is telling that BH didn't pick it up.

brummm 5y ago
Hasn't been American in a while, though. It's been British owned for at least a decade before this recent purchase.
LurkingPenguin 5y ago
Greyhound absolutely fails most of Berkshire's criteria, and the size of the deal ($78 million) is well under the deal size Berkshire is looking for. As for being "iconic", I'm not sure "iconic" is the word I'd use to describe Greyhound. It has a reputation for sure, but not a good one.
- quesera 5y ago
  FWIW, my instantaneous reaction on seeing the title of this post was "wait, isn't Greyhound a special entity designated by US govt, like Amtrak or the USPS?". I knew it couldn't be correct after half a second of reflection, but it's a measure of how "iconic" Greyhound is. Also, they have big real estate (often in beautiful old buildings) in the center of the big cities, and their branding is red white & blue. It seems likely that they don't own the real estate, and maybe the cities own the bus stations which only appear to be operated by Greyhound. I have only been inside about half a dozen bus stations though.