Student Transportation Of America Announces Expiry Of Exchange Offer

Student Transportation Of America Announces Expiry Of Exchange Offer

Toronto, Ontario – September 4, 2007 – Student Transportation of America Ltd. (“STA Ltd.”) and Student Transportation of America ULC (“STA ULC” and, together with STA Ltd., “STA”) announced today that Cdn $45.8 million aggregate principal amount of subordinated notes of STA ULC had been validly deposited to its previously announced exchange offer (the “Exchange Offer”). The Exchange Offer terminated at 5:00 p.m. EDT today, and will not be extended.

Under the Exchange Offer, STA offered holders of subordinated notes of STA ULC (“Notes”) 0.67 common shares of STA Ltd. in exchange for each $3.847 principal amount of subordinated notes of STA ULC (being the principal amount of notes represented by an income participating security).

STA has also announced that, as all conditions of the Exchange Offer have been satisfied, it has taken up and accepted for payment, all Notes so deposited, which represent approximately 51% of the issued and outstanding Notes on a fully diluted basis. Payment for Notes taken up today will be made on or before September 7, 2007. As a result of the exchange, the company will have a majority of common shares (TSX: STB) outstanding versus IPS units and will have reduced its total debt by approximately $45.8 million.

“We are pleased the exchange offer was widely received by Unitholders. STA has always had a common share as part of the IPS unit. We believe this exchange and the eventual exchange of the balance of the notes, which are callable in December 2009, will create common share liquidity and provide shareholders with an attractive monthly Canadian qualified dividend as well as participation in the continued growth of the company,” said Denis J. Gallagher, Chairman and Chief Executive Officer for STA. “The IPS structure was a good vehicle for us to enter the public market in 2004 but it is not well understood by many investors outside of the institutional investment community. This exchange will simplify our capital structure, enhance liquidity and allow us to attract new shareholders,” added Gallagher.

STA has achieved a 22% compounded annual growth rate of revenues for the past five years and has paid 31 consecutive monthly dividends since the Company’s IPO in December 2004. Based on today’s closing price of the common shares, the dividend yield is approximately 8.2%.

Wellington West Capital Markets advised the Company on the exchange offer.

Further information regarding the Exchange Offer is available in the Exchange Offer circular, which is available on SEDAR at


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 4,500 school vehicles in North America. For more information, please visit

Forward-Looking Statements

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, including the acquisition of notes under the Exchange Offer, 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 acquisition of less than a significant number of notes under the Exchange Offer and 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.

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