Student Transportation of America Announces Expiry of Exchange Offer

TORONTO, Sep. 4, 2008 (Canada NewsWire via COMTEX News Network) —

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Student Transportation of America Ltd. (“STA Ltd.”) and Student Transportation of America ULC (“STA ULC” and, together with STA Ltd., “STA”) announced today that approximately Cdn $4.9 million aggregate principal amount of subordinated notes of STA ULC (“Notes”) had been validly deposited pursuant to its exchange offer dated July 8, 2008, as extended by a notice of extension dated August 14, 2008 (the “Exchange Offer”). The Exchange Offer expired at 5:00 p.m. EDT today.

Under the Exchange Offer, STA offered holders of Notes 0.76 of a common share of STA Ltd. in exchange for each $3.847 principal amount of Notes (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 validly deposited prior to
the expiration time. Payment for Notes taken up today will be made on or before September 9, 2008. The Exchange Offer reduces STA’s consolidated indebtedness by approximately Cdn $4.9 million and represents the latest step in STA’s transition to a traditional common share company. The Notes are callable by the Company starting in December 2009 at a redemption price of 105% of the Cdn $3.847 principal amount of each Note, being approximately Cdn $4.039.

STA has achieved a 21% compounded annual growth rate of revenues for the past five years and has paid 42 consecutive monthly dividends since its IPO in December 2004. Based on today’s closing price of the common shares, the dividend is yielding approximately 10.7%.

Wellington West Capital Markets acted as dealer manager for the Exchange Offer and CIBC World Markets acted as co-manager.

Further information regarding the
Exchange Offer is available in the Exchange Offer circular, which is available on SEDAR at www.sedar.com.

THE SECURITIES OFFERED PURSUANT TO THE EXCHANGE OFFER HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS. THIS PRESS RELEASE SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THE SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL.

Profile

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 currently operates more than 5,400 school vehicles in North America. For more information, please visit www.rideSTA.com

Forward-Looking Statements

Certain statements in this news release are “forward-looking statements” within the meaning of applicable securities laws, which reflect the expectations of management regarding, among other matters, STA’s revenues, expense levels, cost of capital, financial leverage, seasonality, liquidity, profitability of new businesses acquired or secured through bids, borrowing availability, ability to renew or refinance various loan facilities as they become due, ability to execute STA’s growth strategy and cash distributions, as well as their future growth, results of
operations, performance and business prospects and
opportunities. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “should”, “plans” or “continue” or similar expressions, and the negative forms thereof, suggesting future outcomes or events.

These forward-looking statements reflect STA’s current expectations regarding future events and operating performance and speak only as of the date of this news release. Forward-looking statements involve significant risks and uncertainties, 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 or by which, such performance or results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking
statements, including, but not limited to, the inability of STA to control its operating expenses, its significant capital expenditures, its reliance on certain key personnel, the possibility that a greater number of its employees will join unions, its acquisition strategy, its inability to achieve our business objectives, significant competition in its industry, rising insurance costs, new governmental laws and regulations, its lack of insurance coverage for certain losses, environmental requirements, seasonality of its industry, its inability to maintain letters of credit and performance bonds and the termination of certain of its contracts for reasons beyond its control. Material factors and assumptions that were relied upon in making the forward-looking statements include the number of Notes acquired pursuant to the Exchange Offer, contract and customer retention, current and future
expense levels, availability of quality acquisition, bid and conversion opportunities, current borrowing availability and financial ratios, as well as current and historical results of operations and performance. Although the forward-looking statements contained in this news release are based upon what STA believes to be reasonable assumptions, investors cannot be assured that actual results will be consistent with these forward-looking statements, and the differences may be material. These forward-looking statements are made as of the date of this news release and STA assumes no obligation to update or revise them to reflect new events or circumstances, other than as required by applicable law.

SOURCE: Student Transportation of America Ltd.

SOURCE: Student Transportation of America ULC

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, kengelbert@ridesta.com

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