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Student Transportation Inc. Secures New Contracts

Wednesday, May 2, 2012 4:13 PM

National Express to Sell Off School Bus Contracts in Texas and Washington to Resolve Antitrust Concerns

WALL, N.J., May 2, 2012 (GLOBE NEWSWIRE) -- Student Transportation Inc., (STI) (Nasdaq:STB) (TSX:STB), North America's third-largest provider of school bus transportation services, confirmed this week the signing of an asset purchase agreement with National Express Corporation (NEX). The agreement opens two additional states for STI to provide transportation services. As a requirement to resolve antitrust concerns in connection with its purchase of Petermann Partners, Inc., NEX will divest of school transportation contracts in the states of Texas and Washington to STI.

"We are delighted we can confirm as reported by the U.S. Department of Justice and NEX that we have entered into an agreement to acquire certain assets of NEX's U.S. subsidiary, Petermann Partners, Inc.," said Denis J. Gallagher, STI Chairman and CEO. "Seven of the eight local school boards involved have overwhelmingly approved the transfer agreements with the remaining one expected shortly. Many of the school boards had members visit our locations in other states to meet current customers and employees to see first hand the quality service we provide in our communities. The responses were fantastic and we are thrilled with the support we have received."

The transfer and asset purchase agreement is anticipated to be completed shortly. STI said the contracts will add annualized revenues of over $19.0 million. The transaction consists of vehicle purchases and assignment of contracts estimated to be worth over $16.0 million. The Company will utilize availability under its senior credit facility to fund the $6.4 million purchase price. Management expects the deal to be accretive to shareholders of its common stock.

"We have the industry expertise required to get this deal done and close in a timely fashion which we believe was a big decision in getting the DOJ and local State Attorney General's recommendation and subsequent approvals. We provided integration plans, financing assurance and other information for a quick closing that NEX needed to complete their pending deal," added Gallagher. "This is a great deal for us as we enter two states that offer future growth opportunities. We have the capital to expand and to help local school districts. We are very excited to be welcoming on the new members of the Petermann operations team in these two states to our family of companies.


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