ComfortDelgro

ComfortDelgro is bidding to enter the Australian taxi market via a A$38.8m acquisition of Swan Taxis, the largest taxi operator in Perth, Australia. Priced at 13x earnings vs Comfort’s 14-15x, the deal is expected to be earnings-accretive. If successful, we would expect the acquisition to improve Comfort’s FY11-12 earnings by 1.5-2% and KE's fair value from $1.87 to $1.90. The deal is likely to take 3 mths to complete, subject to approval by the Australian Competition and Consumer Commission.