ABERDEEN, U.K. — FirstGroup PLC announced that it has begun the sale process of its North American school bus and public transportation companies, after considering selling the businesses since last year.
As School Bus Fleet previously reported, FirstGroup, which is the parent company of First Student, announced in December that its board of directors appointed advisors to “explore all options in respect of our North American contract businesses, First Student and First Transit, including a potential disposal.” The company was in the process of selling Greyhound, which it had announced in May, and was creating an efficiency program for First Bus, its U.K.-based intercity bus service.
Matthew Gregory, FirstGroup’s chief executive, told Financial Times that there had been “significant interest” in First Student and First Transit, which the company is planning to sell by the second half of the year. Gregory added that selling the businesses “is the best way to unlock value in FirstGroup,” that there were not any synergies between the U.S. and U.K. arms of FirstGroup, and that the “inherent value in the group is not really coming through in the share price,” according to the news source.
As SBF previously reported, FirstGroup made the move to sell Greyhound and First Bus in an effort to focus on its pupil transportation and public transit brands. The company noted in a statement announcing that sale that in 2019, First Student and First Transit had collectively generated 60% of its operating profits and “share increasingly similar attributes and opportunities to grow and create value.”
Coast Capital, a majority shareholder in FirstGroup, increased its efforts on Monday to make the company sell the businesses, according to Financial Times. Bloomberg reported in December that the investor had been calling for a breakup of FirstGroup’s companies since it turned down a takeover bid from American private equity firm Apollo Global Management last year, and that FirstGroup recently revealed it suffered a loss in the first half of the year.
First Student confirmed to SBF on Friday that its parent company has begun the process to sell the school bus company, and that it will continue its focus on safe, reliable student transportation.
“As FirstGroup initiates a formal process to sell First Student, this news only reinforces that the strategies we’re deploying to develop and grow our business are working,” the statement read. “This is a great business that has established a strong and profitable platform, which positions us for sustainable growth over time.
First Student added in the statement that it “will continue to invest in new opportunities and technologies that set us apart from our competitors. Through it all, our communities and customers will remain at the heart of everything we do.”