WALL, N.J. — Student Transportation Inc. (ST) has signed three non-material letters of intent that are subject to final due diligence and customer consents to acquire three school bus companies.
The acquisitions, which are scheduled to close in the next 30 to 45 days, will add more than 550 vehicles to the company’s fleet, with annualized revenues of more than $28 million.
ST will fund the acquisitions through its existing credit facility. Officials said the transactions will be immediately accretive to shareholders of its common stock, and they will be consistent with margins and purchase price multiples of previous acquisitions. Final terms of the agreements have not been disclosed.
"These acquisitions fit perfectly with our company culture and operations," said Denis J. Gallagher, ST chairman and CEO. "They will open two new areas of growth for the company and one will tuck in to an existing operating location. We continue to have solid opportunities available to us through our ‘acquisition, bid-in and conversion’ growth strategy. Our acquisition pipeline of high-quality school bus operators remains robust, our contract bid season is just under way and our new sales team is hard at work following up on many new inquiries for our Education Stimulus Plan."
In other news, the company’s board of directors approved the announcement of dividends to quarterly from monthly at its most recent meeting. Dividends will continue to be paid monthly.
"The confidence we have in our cash flows with multi-year agreements, fuel contracts locked in place, plus our consistent performance led to the decision," Gallagher said.