WALL, N.J. — Student Transportation Inc. (STI) has signed four letters of intent subject to final due diligence and customer consents to acquire four school bus companies that will add over 150 vehicles to the company’s fleet and annualized revenues of over $7.8 million.
Additional details will be disseminated upon closing of the acquisitions, which are scheduled prior to the start of the school year in August. The company will fund the acquisitions through its existing credit facility. Management said the transactions will be immediately accretive to shareholders of its common stock upon closing and will be consistent with margins and purchase price multiples of previous acquisitions.
"These acquisitions, while small in size, strengthen our existing operating locations by adding regional density to those areas," said Denis J. Gallagher, chairman and CEO. "We plan on continuing the excellent service these companies have delivered and to provide our added value and expertise in safety and community service. They have very good drivers, top-notch maintenance and support staff, and customers who value safe and reliable local service. Also, each of the new companies has some form of fuel protection clauses in place, which is important criteria for us when making an acquisition.”
Officials added that with recent contract wins and the year-over-year built-in growth from several acquisitions closed in fiscal year 2011, the company is poised for more than 11-percent year-over-year growth in revenues before the new school season starts.
STI also reported that it continues to review solid opportunities available through its acquisition, bid-in and conversion growth strategy.