BARRIE, Ontario — Student Transportation of Canada (STC), an operating subsidiary of Student Transportation Inc., has completed the acquisition of Leuschen Bros. Limited, a school bus operator based in Sudbury, Ontario.
Leuschen will add more than 250 vehicles from three new locations and increase STC's net revenues by $12 million, a 20-percent increase for that subsidiary year over year, according to the company.
Leuschen's main school bus transportation contract was recently tendered and currently runs through June 2016 with agreed-upon annual rate increases. Additionally, Leuschen provides transportation services to physically disabled residents of greater Sudbury, operating as part of the city's Handi-Transit system.
The transaction and closing were contingent upon meeting certain conditions and receiving various consents and renewals, which have been obtained. Management said the transaction is immediately accretive to shareholders of its common stock. While the purchase price was not disclosed, the company funded the deal through its credit facility.
"Leuschen is a fantastic company and a great acquisition for us," said Denis J. Gallagher, chairman and CEO of STC and its parent company. "The company adds Canadian revenues and cash flows, which increase the natural hedge for our continued dividend program. It also increases regional density to our management and operations in Ontario and opens up a new, strategic area of expansion for us in the province. Like so many other great acquisitions we have completed, this is a family business like ours. Since 1952, the Leuschen family and its management team have earned an outstanding reputation in the pupil transportation industry, and we are extremely pleased they chose to partner with us. We are excited to work with them as we get ready for the new school year.
"As we continue to grow, we may see other forms of 'contracted transportation,' similar to ours, such as transportation for our aging population and transportation for the physically challenged, as a natural fit for future expansion. These services are a good fit for the Leuschen operations, and we see them as potential growth opportunities for us as well," Gallagher said.