Student Transportation Expands Through Major Acquisition

Student Transportation Expands Through Major Acquisition

Wall, NJ, May 1, 2006 – Student Transportation of America Ltd. (TSX: STB.UN) today announced it has closed the acquisition of Illinois-based Positive Connections, Inc. (PCI). The acquisition will add 400 vehicles and over US $18 million in annual revenue, and establishes a new platform for operations and growth in the Midwest.

“This acquisition gives us a great position in the Midwestern United States, adding a new geographic region to our operations,” said Denis J. Gallagher, Chairman and CEO. “With a company of this size, we have the opportunity to execute our strategy of adding regional density through acquisitions, bids and conversions in nearby communities and to expand further in other Midwestern states. It is consistent with our focus on rural and suburban markets. We have experience and knowledge of this region and are confident it is a good fit with our criteria of targeted growth. Positive Connections has an excellent driver and safety program, top quality maintenance and support staff, and customers who value safe and reliable local service.”

The acquisition is Student Transportation’s largest since its IPO in December 2004. It will add six locations within two states, Illinois and Minnesota. The fleet is extremely young for its size, with an average age of four years, and is expected to lower STA’s capital expenditures as a percentage of revenue.

“One of our criteria in looking at new markets is to make acquisitions that have fuel cost protection in place. In addition to meeting our disciplined investment criteria, this acquisition has attractive customer protected fuel mitigation clauses. Forty five percent of Positive Connections revenue contracts include a cap on the price of fuel,” added Mr. Gallagher.

Michael Perry and Diann Crawford will continue with the company, with Mr. Perry remaining as President. Mr. Perry has been in the transportation business for 30 years and has a longstanding reputation in the industry and the communities he has served.

“I am pleased that Positive Connections has become part of the STA family of companies, and we look forward to growing this new region and maintain the excellent service our customers expect,” said Mr. Perry. “We will continue to run our operations with a local face and brand, emphasizing our strong commitment to safety.”

Since its IPO in December 2004, STA has increased annualized revenue over US $53 million.

“When we did our IPO 16 months ago we told investors the plan was to have steady growth. Since then, we have executed our business plan of building regional density through both acquisitions and organic growth and expanded our base by opening two new regions of operations, one in Ontario, Canada and now in the US Midwest,” said Mr. Gallagher.

Alluence Capital Advisors, Inc. assisted STA in the transaction.

Forward-Looking Statements

This news release contains “forward-looking statements” within the meaning of applicable securities laws, which reflects the expectations of management regarding the Issuer’s and Company’s results of operations, expense levels, seasonality, cash flows, performance, liquidity, borrowing availability, financial ratios, ability to execute the Company’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 the Company’s current expectations regarding anticipated future events, results, circumstances, performance or expectations that 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.


Student Transportation is the fifth-largest provider of school bus transportation services in North America, conducting operations through local operating subsidiaries. Student Transportation has become a leading school transportation and management company by aggregating operations through the consolidation of existing providers and conversion of in-house operations and currently operates more than 4,000 school vehicles in North America. For more information, please visit

For more information contact:

Denis J. Gallagher
Chairman and Chief Executive Officer
Phone: (732) 280-4200
Fax: (732) 280-4213

Patrick J. Walker
Chief Financial Officer
Phone (732) 280-4200
Fax: (732) 280-4213

Keith P. Engelbert
Director of Investor Relations
Phone: (732) 280-4200
Fax: (732) 280-4213