The majority shareholder of Student Transportation Inc. (STI) is expected to close its acquisition of the North American school bus company by the end of the second quarter, the companies disclosed.
STI said its board of directors unanimously approved the sale to Caisse de depot et placement de Quebec (CDPQ), a fund manager specializing in public and parapublic pension and insurance plans that has invested in the company for the past years. It is joined in the acquisition by insurance and investment company Ullico, Inc.
"This transaction presents a compelling opportunity for our investors to monetize their investment at an attractive price," said STI Chairman, CEO and founder Denis Gallagher. "CDPQ has been invested in our company for 16 years and for most of that time as our largest shareholder. We will continue to be the North American leader in student transportation and our unwavering commitment to our employees, customers, safety, service and innovation will remain unchanged," added Denis J. Gallagher, Chairman and Chief Executive Officer of STI.
Macky Tall, executive vice president of infrastructure for CDPQ and president and CEO of CDPQ Infra, said the transaction "represents a significant step in our relationship with the company, and we look forward to working with the management team for years to come."
The deal is subject to a two-thirds shareholders vote and approval under the Canadian Competition Act and the U.S. HSR Act. Shareholders would receive $7.50 per common share in cash, which STI said represents a 27 percent premium to the 20-day volume weighted average price per common share on the Toronto Stock Exchange based on the exchange rate of $1.2776 Canadian dollars to U.S. dollars.
STI, the third largest school bus contractor in North America, is also listed on the NASDAQ.
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