U.K.-based transportation company Stagecoach Group PLC, through its Scusi Ltd. unit, agreed to sell its North America division to an entity managed by Variant Equity Advisors LLC.

Under the terms of the deal, Scusi will sell 100% of Coach USA Administration Inc.'s equity to Project Kenwood Acquisition LLC for US$207.0 million, reflecting an enterprise value of US$271.4 million. The cash consideration is subject to a "locked box" agreement, wherein it may be adjusted for certain leakage transactions such as further dividends, before deal closing.

Stagecoach will use the cash proceeds to cut its consolidated net debt as it seeks to concentrate on its bus and rail operations in the U.K.

The division operates more than 2,000 buses and coaches across North America. The division's management team will remain in the business once the transaction closes, slated to occur by the end of Stagecoach's financial year to April 27, 2019.

The deal is subject to the approval by the Surface Transportation Board, removal of certain Stagecoach parent company guarantees and other closing conditions.

RBC Capital Markets was financial adviser to Stagecoach on the transaction, while Covington & Burling LLP was its legal adviser. Sidley Austin LLP served as legal counsel to Variant.