ADL strengthens overseas hold by buying Australian coachbuilder

Employee's of the Alexander Dennis Ltd factory work on vehicle components. Picture: Getty
Employee's of the Alexander Dennis Ltd factory work on vehicle components. Picture: Getty
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BUS builder Alexander Dennis Ltd (ADL) yesterday accelerated its international expansion strategy by snapping up an Australian firm in an estimated £25 million deal.

The Falkirk-based vehicle maker has bought Sydney-based Custom Coaches, which traces its roots back to 1955 and which holds a 24 per cent share of the Australian bus-building market.

The deal will add £55m to ADL’s turnover, pushing it through the £500m barrier and representing a trebling of sales over the past five years.

Taking over Custom Coaches, which employs about 400 staff in Adelaide and Sydney, allows ADL to rev-up its overseas presence, which already includes operations in Hong Kong and New Zealand. About half the company’s 1,800 staff are based in Falkirk.

Last month, the Scottish company unveiled a joint venture with Canada-based New Flyer Industries, which makes heavy-duty buses.

ADL chief executive Colin Robertson said: “This is another significant step in our strategy to diversify and grow the business. The Custom brand is an icon in the Australian bus body market, having been part of the transport landscape for 50 years. It has history, heritage and a reputation for quality products.

“It will build on the progress ADL has made in New Zealand in the past two years, where our manufacturing partnership with Kiwi Bus has established us as market leader and a major supplier to cities such as Auckland and Wellington.”

The ADL deal helps reverse a recent trend of Scottish firms being acquired by foreigners. In recent months those succumbing to overseas rivals include Robert Wiseman Diaries (by the German company Muller), healthcare firm ProStrakan (acquired by Japanese firm KHK) and oil explorer Dana Petroleum (bought by the Korea National Oil Corporation).

Finance secretary John Swinney said: “Scotland is recognised internationally for its excellence in engineering and it is fantastic news that ADL is establishing operations in North America and Australia.

“The global economic downturn shows how interconnected world markets are and it is welcome news that, despite the economic climate, an indigenous company like ADL has continued to grow and capitalise on new opportunities in overseas markets.

“I am confident the strengthening of this business will benefit the economy and build on Scotland’s attractiveness as a place for international trade and investment.”

The latest deals mark a pronounced reversal of fortunes for ADL following the financial difficulties of its ex-owner.

A consortium of senior figures from Scotland’s business community bought ADL from the collapsed remains of former parent Mayflower in 2004.

The investors, who paid £90m to bring the company out of administration, include metal magnate and former Rangers Football Club owner Sir David Murray; Stagecoach founder Sir Brian Souter; Souter’s sister, Ann Gloag; and merchant banker Sir Angus Grossart.