Student Transportation Inc. entered the U.S. stock market on Tuesday. CEO and Chairman Denis Gallagher (front-center) rang the bell in NASDAQ's opening ceremony.
WALL, N.J. — Student Transportation Inc. (STI) has acquired A and B Bus Co. of Irwindale, Calif.
Sun Mergers & Acquisition LLC initiated the transaction, acted as exclusive financial advisor and negotiated the transaction on behalf of A and B Bus Co.
A and B Bus Co. has provided student transportation services to the same Southern California region for nearly 40 years. The business consists of contracted public home-to-school bus routes as well as athletic and field trips.
As part of the transaction, Sun negotiated for Ken Ehlers, president of A and B Bus, to remain with the company and continue to run the location’s current operations. STI has entered into a long-term lease of the property and will fund the acquisition through its existing credit facility.
“We had discussions to sell with a few of the big operators, but it went nowhere until we got Scott O’Rourke of Sun involved," Ehlers added. "They prepared a book on our company, presented it to various buyers and generated a lot of interest. Scott negotiated the whole deal, including my employment agreement, our lease and some other elements that were important to us. He also assisted us in finding an attorney and collaborated with everyone until the deal closed. Everything turned out as well as we could have hoped for."
This closing marks Sun Mergers & Acquisition’s seventh school bus transaction over the last year.
In other news, STI’s senior management team hosted the opening bell ceremony on Tuesday to mark the company's initial U.S. listing of its common stock on the NASDAQ Global Select Market.
The company's common stock will trade under the symbol "STB” and will continue to be dual listed on the Toronto Stock Exchange. The company’s convertible debentures will only be traded on the TSX.
"This is an exciting day for us,” STI Chairman and CEO Denis Gallagher said. “Beginning today, U.S. investors have the ability to easily buy and sell our securities through the NASDAQ system and with any broker they choose."
In addition, the company has completed three letters of intent and has been awarded 10 new contracts to provide pupil transportation beginning this school year. Still pending is the completion of a fourth acquisition, which the company expects to wrap up in the coming weeks.
Company officials said the acquisitions and new contract wins will add annualized revenues of over $20 million.
The acquisitions include two in Ontario, Canada — Schumacher Bus Lines in Schumacher and S & K Transportation Ltd. in Listowel, which are both tuck-ins to existing locations — and A and B Bus Co. On completion of the fourth deal, together they will add $7.5 million in annualized revenues.