Student Transportation Completes Acquisition
TORONTO, Jul 15, 2008 (Canada NewsWire via COMTEX News Network) —
<< Expansion to Southwestern Ontario Increases Canadian Revenues to Just Under 25% >>
Student Transportation of Canada (“STC”), an operating subsidiary of Student Transportation of America (“STA”) (TSX: STB), today announced that it has signed and completed the previously announced acquisition of Elgie Bus Lines Limited, a school bus operator based in London, Ontario. The transaction was contingent upon meeting certain conditions and receiving customer consents which have been obtained. Management expects the deal to be accretive to shareholders of its common stock.
“As we mentioned before, this is a great company and a great acquisition for us as it adds to our regional density in Ontario and opens a new area of expansion for us in the southwestern portion of the province. It also increases our Canadian dollar revenues to just under 25% of our total and has good contracts with fuel protection,” said Denis J. Gallagher, chairman and CEO of STC.
is one of the rare transportation company’s on the TSX that actually is doing very well. For our fiscal year ending June 30, 2008, revenue is up year over year consistent with our growth history and strategy, operating cash flows are up substantially and we anticipate seeing margin improvement over the previous fiscal year. The strategy we have developed in our business model has allowed us to continue to grow and create sustainable attractive dividends,” said Gallagher. The closing price of the common shares (TSX: STB) on July 14, 2008 represented a yield of over 9.5%.
Elgie is the company’s eighth acquisition in Canada since its IPO, increasing operations to more than 1,200 vehicles and nearly C$50 million in annualized revenue. The Company utilized its availability under its senior credit facility, recently created with the proceeds of the common share private placement
offerings completed in April 2008, to fund the acquisition.
About Student Transportation
Founded in 1997, Student Transportation is the fourth-largest provider of school bus transportation services in North America, conducting operations through local operating subsidiaries. Student Transportation has become a leading school bus transportation company by aggregating operations through the consolidation of existing providers and conversion of in-house operations and operates more than 5,400 school vehicles in North America. For more information, please visit www.rideSTA.com.
This news release contains “forward-looking statements” within the meaning of applicable securities laws, which reflects the expectations of management regarding STA’s results of operations, expense levels,
cost of capital, financial leverage, seasonality, cash
flows, performance, liquidity, borrowing availability, financial ratios, ability to execute the STA’s growth strategy and cash distributions. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “intend”, “track”, “targeted”, “estimate”, “anticipate”, “believe”, “should”, “plans” or “continue” or similar expressions suggesting future outcomes or events. These forward looking statements reflect STA’s current expectations regarding anticipated future events, results, circumstances, performance or expectations, which are not historical facts. Forward looking statements involve significant risks and uncertainties, and should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not or the times at which or by the performance or results will be
achieved. A number of factors could cause our actual results to differ materially from the results discussed, expressed or implied in any forward-looking statement made by us or on our behalf, including, but not limited to the factors discussed under “Risk Factors” in our Annual Information Form. These forward looking statements are made as of the date of this news release and, except as required by applicable law, we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
SOURCE: Student Transportation of America Ltd.
SOURCE: Student Transportation of America ULC
MEDIA CONTACT: Lynette Viviani, (973) 968-7929 office, (973) 534-1004 mobile, lviviani@rideSTA.com; INVESTOR CONTACTS: Student Transportation of America Ltd., Denis J. Gallagher, Chairman and Chief Executive Officer, (732) 280-4200, (732) 280-4213 (FAX); Patrick J. Walker, Executive Vice President and Chief Financial Officer, (732) 280-4200, (732) 280-4213 (FAX); Keith P. Engelbert, Director of Investor Relations, (732) 280-4200, (732) 280-4213 (FAX), Email: kengelbert@rideSTA.com, Website: www.rideSTA.com
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