It’s a new dawn as we begin to separate from DB and embrace a new future with I Squared
Today marks a huge milestone in our history as we take the first step towards becoming a portfolio company of I Squared Capital, a global infrastructure manager, following the recent signing of a sales agreement between DB and I Squared.
This is a vote of confidence in Arriva following the successful execution of our forward-looking strategy in recent years. Partnering with I Squared, who have a track record of supporting large infrastructure companies, will deliver significant benefits for all our colleagues, passengers and our clients. We should all feel proud of what we have achieved to get us here!
Our CEO Mike Cooper said: “With a relentless focus on creating a stronger and more competitive Arriva for the long-term, we have made significant progress in recent years. This transaction marks an exciting opportunity in this next chapter of our long history.
“I Squared has an established track record of investing to support and develop companies within their portfolio and we are delighted that they have committed to provide Arriva with long-term capital for investment in our fleet decarbonisation as well as expanding and improving our service provision.
“We’re confident that Arriva, with the support of I Squared, will play a vital role in delivering innovative and sustainable public transport offerings. We are looking forward to working with I Squared to realise our ambition to become the leading passenger transport partner across Europe.”
What does this mean for us?
I Squared recognises that our people are our greatest asset and will be central to developing and growing the business in the years to come.
The agreement between DB and I Squared will see the entire Arriva Group and all of our operating businesses being part of the transaction. This means that everything that is part of Arriva, including roles and existing bus and rail contracts, will move over once the transaction completes in April next year at the latest.
I Squared also shares our desire to provide sustainable transport solutions that cater for the needs of today, and tomorrow. This includes transitioning our fleets to greener fuel technologies and making sure our growth is underpinned by a relentless focus on sustainability and responsibility. This is a great outcome for us.
Because of our size and scale, there will be a lot to do between now and when the transaction completes.
Getting to know I Squared
I Squared is an independent global infrastructure manager and they have invested in a diverse portfolio of 72 companies in 59 countries across a wide range of sectors including transport, energy, utilities, digital infrastructure and logistics. Their investments provide essential services to millions of people around the world. They have a strong reputation as an active and supportive investor and have already put capital into many companies that have major operations in the UK, including Energia, Conrad, EXA and Aggreko to name a few.
Commenting on what attracted I Squared to Arriva, Gautam Bhandari, the Global CIO and Managing Partner said: “Transport accounts for around one-fifth of global CO₂ emissions. Three-quarters of this is from road transport, and a greener public transport sector is critical to the shift to lower-carbon infrastructure. Arriva’s strategy for net-zero operations and the decarbonisation of its fleet aligns with our strategy to develop and scale assets with technologies that accelerate the energy transition, as well as providing cleaner air in cities and towns by investing in green public transport. We are excited to work with Arriva and we will invest to support its future growth as a major European bus and rail operator.”
What next?
Today is the beginning of an exciting journey, but there is now much to do as teams across the Arriva Group begin the process of separating us from DB. This can be a complex part of any transaction of this scale, and it will take time – possibly as long as six months, but we expect the transaction to complete in April 2024 at the latest.
In the meantime, we will continue to deliver our day-to-day activities with the same high standards that we always have - serving our clients and PTAs and being a central part of our communities and looking for innovative and more sustainable ways to do things.
Why is DB selling Arriva?
DB has been our shareholder for 13 years and during that time, we have grown our reputation as one of the
leading providers of passenger transport across Europe. DB’s strategy is to focus on its rail business in
Germany and they have, for some time now, wanted to pursue a sale of Arriva once the market conditions
were right. Following the successful execution of our strategy which has enabled us to return to operating
profit following a challenging pandemic, DB feels that the time is right for them now – and Arriva is in a
good place to attract investment under a new shareholder.
Who is I Squared Capital?
I Squared is an independent global infrastructure manager with over $37 billion in assets under
management focused on investing in North America, Europe, Asia, and Latin America. The company has
more than 230 professionals across its offices in London, Hong Kong, New Delhi, Singapore, Taipei, and
Sydney.
I Squared has invested in a diverse portfolio of 72 companies in 59 countries with over 27,000 employees
across the utilities, energy, digital infrastructure, transport, environmental infrastructure, and social
infrastructure sectors providing essential services to millions of people around the world.
I Squared has invested in many companies in the UK and Europe including TIP Group, Energia, Conrad, EXA,
Aggreko, ENVA, and Cube Cold Europe.
Why do they want to buy Arriva?
I Squared invests in companies that provide essential services, and where they see exciting opportunities
for growth. They recognise the strong foundation we have created and the significant potential of our
business, driven by trends such as urbanisation, increased use of public transport, and the decarbonisation
of fleets. They have been impressed by our scale and expertise across Europe and our track record in
operational performance across different modes of transport, as well as our long-standing relationships
with PTAs, and our focus on delivering high-quality services for customers. Importantly, they are also
impressed by the talent of our people right across our organisation.
I Squared is committed to providing long-term investment to support transitioning our fleet to low carbon
technologies and will support innovation to provide sustainable transport solutions that cater for the needs
of today, and in the future. The decarbonisation of public transport infrastructure is a key component of
both the UK and Europe’s overall net zero strategy.
We should feel proud of the company we have built and excited by the opportunities that lie ahead, which
are thanks to everyone’s hard work and commitment over the past few years to create a strong and
competitive Arriva for the long-term.
What will happen to the Arriva name and brand?
We will continue to use our company name and brand following the closing of the transaction next year.
We will however need to develop a plan for removing the DB name from our logo within an agreed
timeframe as part of the separation process, and we will keep you updated on this.
Will there be any changes to the Arriva Management Board and local management teams?
I Squared has confirmed that at this stage there are no planned changes to the senior or local management
teams at Arriva. The operational day-to-day management of the businesses will remain with the existing
management team. Additionally, all existing rail and bus contracts will be unchanged and transferred over
after the sale transaction has concluded, providing continuity and certainty for employees, passengers, and
clients.
When will we no longer be part of DB?
Now that an agreement has been signed there is much work to do to ensure a smooth separation from DB
as we transition into new ownership. Many teams throughout Arriva will be working on this and it can be a
complex process which takes time. We expect the transaction to conclude in April of 2024 at the latest,