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UK Market Data

Plaxton bought by ADL

Alexander Dennis Limited has purchased Plaxton for an undisclosed sum, re-uniting the two former TransBus businesses three years after they were split by the collapse of the Mayflower group. While the move makes sound business sense, it does evoke echoes of the 2000 merger of the UK bus manufacturing interests of Mayflower – Alexander and Dennis – with those of Plaxton’s then owner, Henlys which created the TransBus organisation.

“This move facilitates the exit of funders Aberdeen Asset Management, who have supported our business and its investment plans extremely well in the past three years,” says Plaxton chief executive Brian Davidson.

“It is now time for the business to find a major partner as the industry starts to consolidate”. ADL’s turnover in 2006 was £170million while Plaxton’s was £65million.

ADL employs 1,400 people – 900 at its Falkirk bodybuilding plant, 300 at the Dennis factory in Guildford and 200 in its worldwide aftermarket business. Plaxton employs 530 – most of them at Scarborough, but with some at Anston near Sheffield, location of its coach sales business and its small bus manufacturing unit.

ADL says that the current Plaxton management team will stay in place.

Plaxton’s business is entirely in the UK, and while the bulk of ADL’s customers are UK-based, the company has export sales in North America, where it is selling Enviro500 double-decekers, and in Hong Kong, also an Enviro500 market. Most of the two businesss’s product ranges are complementary, but Plaxton’s Centro bus competes with ADL’s Enviro200 and Enviro300 models.

Plaxton’s coach range dates back to 1999 and is due for an update, as ADL chairman Bill Cameron notes: “The coach business, in particular, now requires significant investment and we are ready to see that through, while continuing to play to the strengths and reputation of the brand.”

Davidson adds: “This is a positive step for both companies. It brings together like-minded people who know the British bus and coach business inside out – and who are enthusiastic about taking both businesses to a new level. At Plaxton we pride ourselves in having a strong management team, a committed workforce and a reputation for quality products. All of these factors will remain intact – with the added bonus that we are now aligned to a successful, financially-sound business that is prepared to invest and to accelerate our forward plans.”

Colin Robertson, who took over as ADL chief executive a month ago, says: “To stay at the forefront in the UK, while also creating a platform for growth internationally, requires a business with scale, purchasing power, unique skill sets and innovative products that can be woven into a powerful product line-up, both at home and abroad. It also needs shareholders who are prepared to invest in the future.

“This deal has all of these ingredients, bringing together three great brands with terrific recent histories. Alexander Dennis is currently outright market leader in the British bus sector – and has a worldwide reputation for double-deck bus products – while Plaxton is by far and away the UK’s most outstanding coach builder. Like ADL, it has experienced a remarkable turn-around in the past three years and re-established itself at the forefront of the industry.

“Importantly, we will continue to invest significantly in new bus and coach products, strengthening our in-house line-up while also forging strong alliances with international manufacturers. ADL and Plaxton are currently involved in new initiatives with names such as Volvo, MAN, Scania, Mercedes and VDL. I expect to see such relationships grow and expand, both at home and abroad.”

He added: “We have taken an important step today, bringing together two companies with complementary products and remarkable synergies. The dexterity this provides will enable us to bring a new dimension to customer relationships and to enthuse the market place with the realisation that the British bus and coach manufacturing sector is in good shape – and ready to take on new challenges.”

While the take-over may seem to some observers like a replay of the 2000 TransBus story, seven years later the two companies are quite different. TransBus inherited three factories building double-deck bus bodies and was slow to deal with excess capacity. All of ADL’s bus body building is carried out at Falkirk. ADL also has a much improved product range, with its Enviro400 double-decker being widely praised, and its new Enviro200 growing in popularity.

Plaxton – which this year marks its centenary – has remained UK market leader in coaches, and has diversified into buses with its Primo integral and Centro body on VDL, Volvo and MAN chassis. The small Primo does not compete with ADL’s existing products, but the Centro does.