EQT, KKR joins race for steering wheel of £2.5bn FirstGroup’s US wing

An infrastructure fund run by one of Scandinavia’s most powerful private equity firms has joined the race for the £2.5bn US operations of FirstGroup, the London-listed transport operator.

Sky News has learnt that EQT Infrastructure tabled an offer thought to have been worth roughly $3.7bn for First Student and First Transit just days before Christmas.

The fund is understood to be one of a small number of bidders which remain in an auction that was signalled by FirstGroup under pressure from activist investors more than a year ago.

KKR, the New York-listed investment giant, is among the other contenders to buy the vast US business.

FirstGroup operates a fleet of more than 40,000 yellow school buses across the country, while its Greyhound network – which is the subject of a separate sale process – comprises more than 1,400 coaches which typically carry 14 million passengers annually.

The company said in December 2019 that it wanted to offload its North American contract businesses in order to pay down debt.

Last month, its chief executive, Matthew Gregory, added that it was “in discussions with a number of credible potential buyers who have a long-term perspective”.