FORT VALLEY, Ga. — School bus manufacturer Blue Bird is on its way to becoming a publicly traded company, with a pending purchase by a Houston-based capital firm.
Hennessy Capital Acquisition Corp. (HCAC) has entered into a definitive purchase agreement to acquire all of the outstanding capital stock of School Bus Holdings Inc., an indirect parent company of Blue Bird Corp., from The Traxis Group BV, which is majority-owned by funds affiliated with Cerberus Capital Management LP.
The aggregate equity purchase price will be $255 million, composed of cash and shares of HCAC common stock. Also, HCAC will assume about $235 million of Blue Bird’s existing indebtedness.
Blue Bird was acquired by the Cerberus affiliate in 2006. Earlier that year, the school bus manufacturer had implemented a restructuring plan. Under the deal announced on Monday, Cerberus will retain an ownership interest in Blue Bird.
Business has been on the upswing for Blue Bird in recent years. The school bus manufacturer’s market share has increased in each of the past four years. Total sales have increased about 40% from 2012 to 2014.
Daniel J. Hennessy, chairman and CEO of HCAC, said that his firm is “extremely pleased to partner with Blue Bird’s management and Cerberus to introduce Blue Bird to the public markets. We are acquiring an iconic American brand with an 87‐year history of innovation and product leadership led by a superb management team at a very attractive price.”
Chan Galbato, CEO of Cerberus Operations and Advisory Company LLC and non‐executive chairman of Blue Bird, said that the school bus manufacturer is “a terrific, well‐run company with great people and products, and we are thrilled to continue our longstanding relationship with them, as Cerberus will retain a significant ownership interest in the company.”
Blue Bird will continue to be led by current President and CEO Phil Horlock.
“We are very excited for Blue Bird to become a public company by partnering with HCAC and delighted that Cerberus will remain a major stockholder,” Horlock said. “Under Cerberus’ stewardship, our Blue Bird team has transformed the business through launching exciting new products and features, improving quality and cost structure, and growing sales and market share. We believe this transaction will enable us to maintain our growth momentum with our exceptional workforce building the world’s finest school bus.”
The transaction is subject to customary closing conditions, including regulatory and stockholder approvals. It is expected to close after HCAC’s special stockholders’ meeting to approve the transaction.
After the transaction closes, Cerberus will be the major stockholder in Blue Bird, retaining more than 40% of the company's stock.