Australian private equity group Allegro will purchase transcontinental passenger rail group Great Southern Rail from British owner Serco.
Allegro announced on Monday that it would acquire GSR, the operator of a trio of iconic passenger services: the Ghan between Darwin and Adleaide, the Indian Pacific between Sydney and Perth, and the Overland between Adelaide and Melbourne.
Adrian Loader, founding partner and managing director of Allegro, said the fund plans to capitalise on the forecast growth of the luxury experiential tourism sector in Australia.
“We view this as an opportunity to cater to the high-end tourism market,” Loader said.
“The Ghan and The Indian Pacific are iconic rail experiences positioned to provide guests with an opportunity to experience an authentic Australian adventure through the comfort and luxury of travelling by rail.”
Allegro has some experience in the transport and tourism sector: the firm is invested in Australian bus body manufacturer Custom Bus, and in the past held a stake in caravan park owner/operator Discovery Holiday Parks.
Loader said Allegro, which has more than $450 million in committed capital from investors, is interested in businesses that require capital and expertise to grow.
“Through working with management and other stakeholders, we plan to build value and realise the growth potential of these unique Australian assets,” Loader said.
“We look forward to partnering with GSR’s existing management team to generate further benefits for the company’s employees, customers and suppliers.”
GSR chief executive Chris Tallent is expected to stay on after the transaction takes place.
“We look forward to continuing our transformation of Great Southern Rail into one of the world’s greatest rail experience companies in partnership with an experienced tourism investor like Allegro,” Tallent said.
Allegro will fund the acquisition with 100% equity. No formal announcement has been made regarding the value of the deal.
The deal is expected to be completed within six weeks, subject to customary approvals.