Builds New Territory; Continues Lockport Company's 80-Year Record of Service Excellence
WALL, NJ, Jan. 11 /CNW/ - Student Transportation Inc. ("STI")(TSX: STB),
North America's third-largest provider of school bus transportation
services, today announced it has completed the acquisition, after the
previously announced letter of intent, of Ridge Road Express, Inc., a
wholly-owned subsidiary of Grand Island Transit Corporation dba Grand
Tours, and Scholastic Transportation Management Services, Inc., all
based in Lockport, New York. The transaction and closing were
contingent upon meeting certain conditions and receiving various
consents and renewals, which have been obtained. Management expects the
deal to be immediately accretive to shareholders of its common stock.
The acquisition will add over 320 vehicles, annualized revenues of just
over US$16 million and six new locations for STI.
"With this acquisition we have completed the second of three previously
announced Letters of Intent we signed last month," said Denis J.
Gallagher, Chairman and Chief Executive Officer. "Grand Tours, Ridge
Road Express and Scholastic Transportation Management are major new
additions to our family. We welcome Tom Weeks and his entire staff to
our growing family of companies. Tom will be joining our senior
management team and we look forward to his continued leadership. His
experience and commitment to the school bus industry, particularly in
New York State, is highly regarded by many and fits very well with our
on-going operations in New York State."
The Company utilized availability under its current senior credit
facility to fund the acquisition. The transaction share purchase
agreement was funded with a combination of cash and stock.
"This merger will strengthen our regional platform and build on our
long-term business objectives," said Gene Kowalczewski, Director of
Operations for STI. "I have known Tom for many years and will work
closely with him and the staff maintaining and developing new business.
Tom has a highly dedicated team of drivers, bus aids, supervisors, and
mechanics who will continue to be great assets to the operation. We're
also excited to continue the good work of the Weeks' Family Foundation Scholarship Program, which, like our STA Education Foundation, seeks to increase awareness
of the importance in community service and provides scholarships to
high school seniors in communities they serve."
Commenting on the transaction, Tom Weeks, President of the three
companies said, "This was an emotional decision for us. However, when I
met Denis Gallagher and the STI team, it wasn't a hard decision at all.
STI has built a tremendous team with a reputation for quality service.
It is very much a family business like ours. I am very excited about
joining the Student Transportation family of companies and being part
of the senior management team. We will still be known locally as Grand
Tours, Ridge Road Express, and Scholastic Transportation Management
Services, and our drivers and vehicles will continue to provide safe,
economical transportation for our charter customers and for thousands
of students each year from school districts across Western New York."
Sun Mergers & Acquisitions based in Hasbrouck Heights, N.J. acted as
sole financial advisor for the
About Student Transportation
Founded in 1997, Student Transportation Inc. (STI) is North America's
third-largest and fastest-growing provider of school bus transportation
services, operating more than 7,000 vehicles. STI's family of local
companies delivers safe, reliable and cost-effective transportation
solutions to school districts throughout the U.S. and Canada. Services
are delivered by drivers, dispatchers, maintenance technicians,
terminal managers and others who are caring members of their local
communities. For more information, please visit www.rideSTA.com.
Certain statements in this news release are "forward-looking statements"
within the meaning of applicable securities laws, which reflect the
expectations of management regarding, among other matters, STI's
revenues, expense levels, cost of capital, financial leverage,
seasonality, liquidity, profitability of new businesses acquired or
secured through bids, borrowing availability, ability to renew or
refinance various loan facilities as they become due, ability to
execute STI's growth strategy and cash distributions, as well as their
future growth, results of operations, performance and business
prospects and opportunities. Forward-looking statements generally can
be identified by the use of forward-looking terminology such as "may",
"will", "expect", "intend", "estimate", "anticipate", "believe",
"should", "plans" or "continue" or similar expressions, and the
negative forms thereof, suggesting future outcomes or events.
These forward-looking statements reflect STI's current expectations
regarding future events and operating performance and speak only as of
the date of this news release. Forward-looking statements involve
significant risks and uncertainties, should not be read as guarantees
of future performance or results, and will not necessarily be accurate
indications of whether or not, or the times at or by which, such
performance or results will be achieved. A number of factors could
cause actual results to differ materially from the results discussed in
the forward-looking statements, including, but not limited to, the
inability of STI to control its operating expenses, its significant
capital expenditures, its reliance on certain key personnel, the
possibility that a greater number of its employees will join unions,
its acquisition strategy, its inability to achieve our business
objectives, significant competition in its industry, rising insurance
costs, new governmental laws and regulations, its lack of insurance
coverage for certain losses, environmental requirements, seasonality of
its industry, its inability to maintain letters of credit and
performance bonds and the termination of certain of its contracts for
reasons beyond its control. Material factors and assumptions that were
relied upon in making the forward-looking statements include contract
and customer retention, current and future expense levels, availability
of quality acquisition, bid and conversion opportunities, current
borrowing availability and financial ratios, as well as current and
historical results of operations and performance. Although the
forward-looking statements contained in this news release are based
upon what STI believes to be reasonable assumptions, investors cannot
be assured that actual results will be consistent with these
forward-looking statements, and the differences may be material. These
forward-looking statements are made as of the date of this news release
and STI assumes no obligation to update or revise them to reflect new
events or circumstances, other than as required by applicable law.
SOURCE Student Transportation Inc.
For further information:
Student Transportation Inc.
Patrick J. Walker
Executive Vice President and Chief Financial Officer
Keith P. Engelbert
Director of Investor Relations
(732) 280-4213 (FAX)