Student Transportation Announces Acquisition

    Expansion to Southwestern Ontario Increases Canadian Dollar Cash Flow,
    Adds 200 Vehicles, Fuel and Currency Protection

    TORONTO, July 2 /CNW/ - Student Transportation of Canada ("STC"), an
operating subsidiary of Student Transportation of America ("STA") (TSX: STB),
today announced that it has entered into an agreement to acquire Elgie Bus
Lines Limited, a local school bus operator based in London, Ontario.
Management expects the deal to be immediately accretive to shareholders of its
common stock. The closing is contingent upon customer consent to the
transaction which the parties expect shortly.
    Elgie will add more than 200 vehicles and four locations to STC's Ontario
operations, and C$8.2 million in annual revenue for the upcoming fiscal year.
The contract agreements with its school board customers provide for a revenue
increase for the current year and a fuel cost mitigation provision. Recently,
the Ontario Ministry of Education announced a grant to school boards for
assistance with higher fuel costs incurred in the 2007-2008 school year.
    "This is another very good strategic acquisition for us in Ontario," said
Denis J. Gallagher, chairman and CEO of STC. "We continue to expand our
footprint in the province as we open up a new service area in southwestern
Ontario. The acquisition increases our Canadian dollar cash flow and further
increases our natural currency hedge, which in addition to fuel mitigation,
has been a strategic objective of ours. Almost all of the new business we've
added this year in Canada and the U.S. includes fuel protection or 100 percent
customer-paid fuel.
    "The Elgie family has served the greater London area with outstanding
service and dedication for over 55 years. We are pleased to welcome Brad Elgie
as he joins our management team and the entire team of drivers, mechanics and
all other key staff members to our STC family of companies. We look forward to
working with them and continuing the tradition of service excellence they have
developed," Gallagher said.
    Once completed, Elgie will be the company's eighth acquisition since its
IPO, increasing its Canadian operations to more than 1,200 vehicles and nearly
C$50 million in annualized revenue. The Company plans to utilize availability
under its senior credit facility, recently created with the proceeds of the
common share private placement offerings completed in April 2008, to fund the
    Alluence Capital Advisors Inc., based in Mississauga, Ontario, acted as
financial advisors for the company.

    About Student Transportation

    Founded in 1997, Student Transportation is the fourth-largest provider of
school bus transportation services in North America, conducting operations
through local operating subsidiaries. Student Transportation has become a
leading school bus transportation company by aggregating operations through
the consolidation of existing providers and conversion of in-house operations
and operates more than 5,400 school vehicles in North America. For more
information, please visit

    Forward-Looking Statements

    This news release contains "forward-looking statements" within the
meaning of applicable securities laws, which reflects the expectations of
management regarding STA's results of operations, expense levels, cost of
capital, financial leverage, seasonality, cash flows, performance, liquidity,
borrowing availability, financial ratios, ability to execute the STA's growth
strategy and cash distributions. Forward-looking statements generally can be
identified by the use of forward-looking terminology such as "may", "will",
"expect", "intend", "track", "targeted", "estimate", "anticipate", "believe",
"should", "plans" or "continue" or similar expressions suggesting future
outcomes or events. These forward-looking statements reflect STA's current
expectations regarding anticipated future events, results, circumstances,
performance or expectations, which are not historical facts. Forward-looking
statements involve significant risks and uncertainties, and 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 which or by the
performance or results will be achieved. A number of factors could cause our
actual results to differ materially from the results discussed, expressed or
implied in any forward-looking statement made by us or on our behalf,
including, but not limited to the factors discussed under "Risk Factors" in
our Annual Information Form. These forward-looking statements are made as of
the date of this news release and, except as required by applicable law, we
undertake no obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events or otherwise.

For further information:

For further information: MEDIA CONTACT: Lynette Viviani, (973) 968-7929
office, (973) 534-1004 mobile,; INVESTOR CONTACTS:
Student Transportation of America Ltd., Denis J. Gallagher, Chairman and Chief
Executive Officer, (732) 280-4200, (732) 280-4213 (FAX); Patrick J. Walker,
Executive Vice President and Chief Financial Officer, (732) 280-4200, (732)
280-4213 (FAX); Keith P. Engelbert, Director of Investor Relations, (732)
280-4200, (732) 280-4213 (FAX), Email:; Website:

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