Information on the Target

Umove A/S, based in Denmark, is the largest private bus operator in the country, providing public transportation services under contracts with four out of five public transport authorities. With a workforce of approximately 1,000 employees, Umove operates a fleet of 400 buses and generates an annual turnover of 550 million DKK, covering over 40 million kilometers each year. The company functions through two main entities: Umove Øst A/S and Umove VEST A/S, with its headquarters situated in Glostrup and Horsens.

Recent developments include the decision by Umove's owners to sell 85% of the company's shares to Cube Infrastructure Fund II. The senior management team of Umove will retain a 15% stake in the company, allowing them to continue guiding the organization through its growth and operational strategies.

Industry Overview in Denmark

The public transportation sector in Denmark is vital for sustainable urban mobility, encompassing various modes including buses, trains, and ferries. The government has prioritized public transport development to improve accessibility, reduce traffic congestion, and diminish environmental impacts. Investments in infrastructure have seen an upward trend, reflecting a commitment to enhancing the public transport framework.

Denmark’s public transportation landscape is characterized by a mix of public and private operators, with private entities like Umove playing an increasingly significant role. The Danish government actively encourages competition in this sector, which has resulted in improved service delivery and innovation among operators. Additionally, the integration of various transport modes is a key focus to promote seamless travel for passengers.

Future growth in the industry is expected as infrastructure projects, including new rail lines and bus rapid transit systems, are undertaken. This provides opportunities for existing operators to expand their services. Moreover, a shift towards greener transportation solutions aligns with the broader European goals of reducing carbon emissions.

The rail sector, in particular, holds promising potential for Umove, as the company seeks to diversify its operations and enter the rail market, leveraging its existing expertise in public transport.

The Rationale Behind the Deal

The acquisition of Umove by Cube Infrastructure Fund II represents a strategic investment aimed at fostering the company's growth in both the bus and potential rail markets. Cube's financial backing will allow Umove to enhance its existing operations and support necessary expansions.

With a proven track record in public transport investments, Cube Infrastructure Fund II is well-positioned to provide the essential capital and strategic guidance needed for Umove to achieve its growth ambitions. The management team values this partnership, viewing it as a pathway to realize their goals of expanding to rail operations and strengthening their position in Denmark's transport sector.

Information about the Investor

Cube Infrastructure Fund II, managed by Cube Infrastructure Managers, is a renowned long-term infrastructure fund based in Luxembourg. The fund's primary objective is to invest in regulated brownfield infrastructure assets that meet essential needs of local public authorities, mainly within the European Union.

Cube's investment strategy, termed "Buy-&-Grow," focuses on generating a blend of current yield and long-term capital appreciation, particularly in three strategic sectors: Public Transport, Energy Supply, and Fiber Communication. The firm utilizes the insights and experiences gained from its predecessor fund, Cube Infrastructure Fund I, to inform future investments.

View of Dealert

The decision by Umove to partner with Cube Infrastructure Fund II is poised to be a beneficial one. Given Cube's robust history in the public transport sector and its financial capabilities, this partnership could enable Umove to not only enhance its current bus operations but also to successfully navigate its expansion into the rail market.

Maintaining a 15% stake in the company reflects the existing management's confidence in the deal and their commitment to the company's future. This arrangement promotes a collaborative approach where the management team continues to drive the company’s strategic direction while benefiting from Cube's extensive resources and expertise.

Furthermore, the alignment of Cube’s investment strategy with Umove’s operational goals suggests a well-suited partnership. The ongoing support from Cube could facilitate rapid growth and innovation within Umove, potentially setting a benchmark for performance in the Danish public transport sector.

Overall, this investment opportunity appears promising for Umove, given the potential for increased market share and operational efficiency, which could lead to a greater competitive edge in both the public bus and rail sectors.

View Original Article