M&A News: ComfortDelGro Buys Ground Management Specialist CMAC
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M&A News: ComfortDelGro Buys Ground Management Specialist CMAC

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ComfortDelGro is making a strategic acquisition of ground transport and accommodation management provider CMAC for £80.2 million.

SGX-listed ComfortDelGro Corporation Limited (SG:C52) acquired Britain’s ground transport management and accommodation solutions specialist CMAC Group for £80.2 million via its wholly owned subsidiary. The acquisition was made through bank funding. ComfortDelGro does not expect the deal to have any material impact on its earnings per share for Fiscal 2024.

ComfortDelGro is a global transportation company with an extensive fleet that includes buses, taxis, and various rental vehicles. C52 shares have gained over 16% in the past year.

Here’s How CMAC Will Add Value to ComfortDelGro

CMAC’s operations are highly complementary to ComfortDelGro’s businesses in the U.K. and Europe and are expected to enhance the company’s offerings and expand its footprint.

CMAC is a point-to-point transport service provider in the U.K., France, Spain, Portugal, Greece, and the Netherlands. Its services include planned and emergency passenger transport to rail, travel, healthcare, corporate, and public sectors.

Some of the major businesses that CMAC handles include airlines, ground handlers, train operators, and companies. CMAC also boasts a wide network of approved and certified suppliers and has access to over 2.5 million vehicles.

ComfortDelGro continues to bolster its portfolio with strategic acquisitions. The company recently announced the acquisition of Australian taxi operator A2B Australia Ltd. (AU:A2B) for AU$182 million in cash. This acquisition will help the company expand its footprint in the continent.

Is ComfortDelGro a Good Buy Now?

Following the news, research firm DBS reiterated a Buy rating on C52 shares with a price target of S$1.67 (19.3% upside). DBS is impressed by ComfortDelGro’s strategy of moving away from low-margin businesses and shifting toward fast-growing stable businesses like CMAC. Further, DBS believes that CMAC has an asset-light business and will help expand C52’s margins over time. The firm’s calculation shows that CMAC will add 0.8% to 1.0% to C52’s FY24 estimated earnings.

Overall, C52 stock commands a Strong Buy consensus rating on TipRanks based on six Buys and one Hold recommendation. The ComfortDelGro share price target of S$1.56 implies 11.5% upside potential from current levels.



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