Private equity firm TPG to acquire 70% stake in Australasian largest public transport operator Kinetic

Australian public transport operator Kinetic has entered into an agreement with U.S.-based investment firm TPG, under which the latter will acquire a 70 percent equity interest and become the company’s majority shareholder.

The transaction, expected to close in the coming months subject to regulatory approvals, marks a new phase in Kinetic’s expansion across zero-emission bus and rail operations in Australia, New Zealand, and international markets.

According to Kinetic, the new partnership with TPG provides financial capacity and expertise to accelerate its transition to a fully net-zero platform. Media commentary places the enterprise value of the transaction at above USD 4.0 billion, though exact terms remain undisclosed

Kinetic gets investment from TPG

Under the agreement, Canadian pension fund OPTrust will fully exit its shareholding, while UK-based Foresight Group will retain a 30% stake. TPG’s investment will be made through its TPG Rise Climate platform, one of the largest global private-market vehicles focused on decarbonisation. The deal is channelled via its Climate Transition Infrastructure strategy, which targets scalable electrification and green mobility assets, Kinetic states.

Media coverage stresses that Kinetic’s revenue base in contracted services makes it attractive to infrastructure-oriented investors: the Australian Financial Review notes TPG is betting on the predictability of mass transit cash flows and the growth in electrification capex. Media reports also point to India as a future target.

Kinetic is currently the largest mass transit operator in Australasia, with over 12,000 buses and 400 trains operated across seven countries through its various subsidiaries. The group also holds a 51% stake in the UK-based Go-Ahead Group, a major player in the British public transport sector.
Through Go-Ahead, Kinetic oversees one of the UK’s largest zero-emission bus fleets — around 1,500 battery-electric units in operation — alongside recently expanded rail activities, including the Elizabeth Line in London and the Stockholm Metro, one of Europe’s largest public transport contracts.

In Australia and New Zealand, Kinetic operates more than 300 battery-electric buses and 11 electric depots, supported by long-term contracts with public authorities. Recent developments include a 10-year contract renewal with the Victorian Government, an $80 million (€74 million) investment to electrify the SkyBus airport fleet by 2034, and the start of new routes in Melbourne, Sydney, and Perth focused on low-emission mobility.

Kinetic Group Chief Executive Officer Michael Sewards states: “Kinetic has always been focused on delivering safe, reliable and sustainable transport for the communities we serve. This new partnership with TPG supports our long-term vision and will help us deliver Kinetic to even more communities, and strengthen our commitment to building a net zero transport platform, both here in Australia and New Zealand and globally. I want to acknowledge and thank OPTrust for their incredible support over the past 11 years. Their initial belief in the vision Adam Begg and I outlined in 2014, and their subsequent long-term commitment has been instrumental in shaping Kinetic’s leadership position and demonstrating that our mass transit platform is an attractive and scalable investment. This next step in our journey is an important affirmation of our strategy and will enable us to accelerate our zero-emission ambitions. More than ever, our contracting partners are seeking a transport provider with the global expertise, strength, resources and vision to achieve transformation in their transport network and decarbonisation aspirations”.

Scott Lebovitz, a Managing Partner and Head of Infrastructure for TPG Rise Climate, said: “Kinetic and its customers benefit from the company’s innovation and early mover advantage in the electrification of public transport. Municipalities are continuing to pursue electrification to improve reliability and sustainability of their public transit systems, improve urban air quality, and reduce noise and congestion – Kinetic has established itself as the trusted partner of choice for cities around the world. From Michael and the management team through to the drivers, workshop staff, and depot managers, Kinetic’s people are what set the company apart, and we are excited to partner with them to further scale the business.