SeaLink Travel Group Limited (ASX:SLK) entered into binding agreement to acquire Transit Systems Pty Ltd from nineteen vendors including Neil Smith for approximately AUD 710 million on October 8, 2019. SeaLink Travel Group Limited is also acquiring Tower Transit Group Ltd and their broader group of entities as part of the transaction. The consideration for the agreements comprises upfront stock issuance of AUD 269 million and cash of AUD 118 million and then assuming debt and debt-like items of AUD 211 million, deferred consideration of AUD 37 million paid in three equal installments over three years and an earn out of AUD 63 million dependent on financial performance. Net debt is inclusive of AUD 37 million of deferred consideration and exclusive of the AUD 63 million of earn-out consideration. As part of the agreed consideration SeaLink will be issuing 72,869,945 SeaLink shares to nineteen vendors (representing approximately 33.4% of the total SeaLink shares on issue immediately following completion of the transaction). Consideration will be financed from issuance of new shares for AUD 154 million and new multi-tranche debt and revolving credit facilities (including the refinancing of SeaLink and Transit Systems Group’s existing debt and other financing arrangements). The deferred consideration and earn-out consideration, to the extent paid, will be funded from operating cash flow and available debt capacity. Break fees of AUD 5 million is payable from SeaLink Travel Group Limited if deal is terminated. For the year ended June 30, 2019, Transit Systems Pty Ltd generated EBIT of AUD 61 million, revenue of AUD 895 million and EBITDA of AUD 78 million. Current Transit Systems Group Chief Executive Officer, Clint Feuerherdt will replace Jeff Ellison as Chief executive Officer of SeaLink. Neil Smith also the current Chairman of Transit Systems Group, will join the SeaLink Board of Directors as a non-executive director. The deal is subject to approval from shareholders of SeaLink Travel Group Limited, FIRB approval and ASIC. The SeaLink Directors unanimously recommend that shareholders vote in favor of the acquisition. On December 6, 2019, SeaLink Travel confirms satisfaction of the FIRB Approval condition contained in the sale agreements. The Directors of SeaLink recommend that shareholders vote in favour of the proposed acquisition, in the absence of a superior proposal and subject to the Independent Expert continuing to conclude that the proposed acquisition is fair and reasonable (or not fair but reasonable) to SeaLink shareholders. As of November 8, 2019, SeaLink Travel Group Limited issued notice to its shareholders for extraordinary general meeting to be held on December 18, 2019. As on December 18, 2019, the transaction has been approved by the shareholders of SeaLink Travel. The deal is expected to close in calendar year 2020. Completion is expected in January 2020. The transaction is expected to be accretive to shareholders of SeaLink Travel Group Limited. Macquarie Capital (Australia) Limited acted as financial advisor and James Burchnall, Michael Garry, John Kain, Alyce Ricciardi and Michael Chrisohoou of Kain Corporate and Commercial Lawyers acted as legal advisor for SeaLink Travel Group Limited. Grant Thornton Corporate Finance Pty Ltd is appointed as an Independent Expert to evaluate the fairness and reasonability of deal. SeaLink Travel Group Limited (ASX:SLK) completed the acquisition of Transit Systems Pty Ltd from nineteen vendors including Neil Smith on January 16, 2020. As of January 8, 2021, 36.43 million shares escrowed as agreed between the parties will be released on January 16, 2021 while remaining 36.43 million will be released on January 15, 2022.