FirstGroup PLC has announced that it has entered into an agreement for the sale of its North American school bus and public transportation companies to global investor EQT Infrastructure.
The agreement to acquire FirstGroup’s contract business — First Student and First Transit — is reportedly for a total of $4.6 billion, according to a news release from the investor.
As School Bus Fleet previously reported, FirstGroup first announced a review of strategic alternatives regarding the sale of First Student and First Transit in December 2019. At the same time, the company was also in the process of selling Greyhound, which it had announced in May 2019, and was creating an efficiency program for First Bus, its U.K.-based intercity bus service. About three months later, in March 2020, FirstGroup initiated a formal process to sell both its school bus and public transit divisions.
As part of the sale agreement, First Student and First Transit operations will reportedly continue as usual and uninterrupted with the same local teams and leadership, according to a news release from the school transportation provider.
“We are pleased to have agreed on the sale of First Student and First Transit in a transaction which recognizes their strategic value. Both are resilient, high-quality businesses with strong prospects for returning to normal levels of service following the pandemic,” said Matthew Gregory, FirstGroup’s chief executive, in First Student’s news release. “Our colleagues at First Student and First Transit have built excellent relationships with their customers over many years, and we are proud of their commitment and expertise. I would like to pay tribute to everyone in these businesses and acknowledge the vital role they play in their communities, both now and for many years to come.”
Paul Osland, president of First Student, added in the release that the sale reinforces the company’s steps to grow its business.
“While challenging, the pandemic has illustrated that we are able to maintain operations and generate stable returns even in the most difficult operating conditions,” he said. “Our full focus continues to be on providing safe, reliable, industry-leading service in the communities where we operate.”
“This is a great business that has established a strong and profitable platform which positions us for sustainable growth over time,” said First Transit President Brad Thomas. “We 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.”
The sale, which is subject to both FirstGroup shareholder approval and regulatory approval, is expected to be completed in the second half of 2021.