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FirstGroup set to acquire Laidlaw

NAPERVILLE, Ill. — A pending deal would position the two largest school bus operators in North America under a British company.

March 1, 2007
2 min to read


NAPERVILLE, Ill. — A pending deal would position the two largest school bus operators in North America under a British company.

Naperville-based Laidlaw International Inc. has entered a merger agreement in which U.K.-based FirstGroup PLC would acquire all of its outstanding common shares.

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Laidlaw International is the holding company for Laidlaw Education Services — which runs about 40,000 school buses in the U.S. and Canada — along with Greyhound Lines, Greyhound Canada and Laidlaw Transit.

FirstGroup is the parent company of Cincinnati-based First Student — which runs about 23,000 school buses in the U.S. and Canada. FirstGroup is the largest bus and rail provider in the U.K. and also operates First Transit and First Services in North America.

Kevin Benson, president and CEO of Laidlaw International, said that the deal will bring together well-known brands and provide “a sound economic and operational base from which to continue many of the efficiency initiatives that we have underway.”

Moir Lockhead, chief executive of FirstGroup, said the move will considerably enhance his company’s activities in North America.

“Laidlaw is an established, well-run company that shares our commitment to safety and delivering high-quality services to our customers and the communities we serve,” Lockhead said.

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Regarding the potential impact of the deal on the staff of Laidlaw and FirstGroupÕs other U.S. businesses, Lockhead said, “Those people who are engaged in running buses in our network in North America and those that are running them with Laidlaw will continue to do that.

“I welcome them all into FirstGroup,” Lockhead said. “It’s good for them, it’s good for us and our customers will benefit.”

The transaction, which at press time was awaiting approval by the stockholders of both Laidlaw and FirstGroup, is valued at approximately $3.6 billion, including the assumption of $800 million of debt.

FirstGroup’s first large U.S. investment came in 1999 with its acquisition of Ryder Public Transportation Services. First Student was formed from the combination of Ryder’s school transportation division and several other large busing companies.

The initial First Student fleet comprised about 9,000 school buses. With the acquisition of Laidlaw, FirstGroup would own more than 60,000 school buses in North America.

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The next-largest pupil transportation provider in North America, National Express Corp., is also a subsidiary of a British firm: London-based National Express Group PLC.

National Express Corp. includes two large contractor brands: Durham School Services in the U.S. and Stock Transportation in Canada. The companies’ combined fleet adds up to about 12,000 school buses.

About 120,000 of the 473,000 school buses in the U.S. are owned by contractors. In Canada, contractors own about 30,000 of the 40,000 total school buses.

 

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