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Student Transportation of America, Inc. et al.--Acquisition of Control--West Point Tours, Inc. Publication: Federal Register Agency: Surface Transportation Board Byline: Regena Smith-Bernard Date: 11 September 2024 Subjects: American Government  , Buses
Topics: West Point Tours, Student Transportation of America |
[Federal Register Volume 89, Number 176 (Wednesday, September 11, 2024)]
[Notices]
[Pages 73741-73742]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-20421]
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SURFACE TRANSPORTATION BOARD
[Docket No. MCF 21121]
Student Transportation of America, Inc. et al.--Acquisition of
Control--West Point Tours, Inc.
AGENCY: Surface Transportation Board.
ACTION: Notice tentatively approving and authorizing finance
transaction.
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SUMMARY: On August 12, 2024, Student Transportation of America, Inc.
(STA), a noncarrier, and its parent entities (collectively, Applicants)
filed an application seeking authority for STA to acquire all voting
securities of West Point Tours, Inc. (WPT), a passenger motor carrier
that holds operating authority issued by the Federal Motor Carrier
Safety Administration (FMCSA). The Board is tentatively approving and
authorizing the transaction, and, if no opposing comments are timely
filed, this notice will be the final Board action.
DATES: Comments must be filed by October 28, 2024. If any comments are
filed, Applicants may file a reply by November 12, 2024. If no opposing
comments are filed by October 28, 2024, this notice shall be effective
on October 29, 2024.
ADDRESSES: Comments, referring to Docket No. MCF 21121, may be filed
with the Board either via e-filing on the Board's website or in writing
addressed to: Surface Transportation Board, 395 E Street SW,
Washington, DC 20423-0001. In addition, send one copy of comments to
STA's representative: Mark J. Andrews, Clark Hill PLC, 1001
Pennsylvania Ave. NW, Suite 1300 South, Washington, DC 20004.
FOR FURTHER INFORMATION CONTACT: Brian O'Boyle at (202) 245-0364. If
you require an accommodation under the Americans with Disabilities Act,
please call (202) 245-0245.
SUPPLEMENTARY INFORMATION: According to the application, STA is a New
Jersey-based noncarrier that controls multiple passenger motor carriers
that hold operating authorities issued by the FMCSA.\1\ STA is a
subsidiary of Student Transportation of America Holdings, Inc. (STA
Holdings), a Delaware corporation and noncarrier. STA Holdings, in
turn, is a subsidiary of Spinner US Acquireco, Inc. (Spinner),\2\ also
a Delaware corporation and noncarrier, which will remain under the
majority ownership of Caisse de d[eacute]p[ocirc]t et placement du
Qu[eacute]bec, a pension fund based in the Canadian province of Quebec.
(Appl. 5.) Applicants state that the carriers STA controls primarily
provide school bus transportation under contract with local school
districts, a service that they state is covered by broad exemptions
from FMCSA regulation. (Id. at 2.) \3\ According to Applicants, STA and
its subsidiaries currently have approximately 23,000 employees, utilize
an estimated 22,000 vehicles, and transport approximately 1.25 million
students per day based on a 180-day school year. (Appl. 4.) Applicants
state that while exempt school transportation accounts for
approximately 97% of STA's approximately $1.3 billion in annual
revenues, remaining revenues are generated from use of its vehicles for
charter and special operations not involving the transportation of
students to and from schools. (Id. at 2, 4.)
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\1\ Additional information about the carriers controlled by STA,
including U.S. Department of Transportation (USDOT) numbers, motor
carrier numbers, and USDOT safety fitness ratings, can be found in
Exhibit B of the application.
\2\ Further information about Spinner's corporate structure and
ownership can be found in Exhibit A of the application.
\3\ See 49 U.S.C. 13506(a)(1) (exempting from both Department of
Transportation and Board jurisdiction ``a motor vehicle transporting
only school children and teachers to or from school'').
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According to the application, WPT is a New York state-based carrier
that holds FMCSA operating authority as well as intrastate operating
authorities in New York state and Pennsylvania. (Id. at 3.) Like STA's
carrier subsidiaries, WPT primarily provides school bus transportation
under contracts with local school districts. (Id. at 2-3.) WPT
transports approximately 9,640 students per day during the school year,
employs approximately 200 drivers, and has a fleet of 220 vehicles,
consisting primarily of school buses but also approximately 15 motor
coaches. (Id. at 4.) The application states that WPT generates annual
revenues of approximately $21 million, about 75% of which are derived
from school-related transportation, with the remainder being derived
from charter and special operations centered on the West Point Military
Academy and nearby areas of the Hudson River Valley in New York state.
(Id.) WPT's interstate motorcoach operations carry approximately 24,000
passengers annually. (Id.)
Pursuant to an agreement executed on July 17, 2024, STA will
acquire all voting securities of WPT. (Id. at 2, 4.) Upon closing of
the proposed transaction, WPT will become a direct subsidiary of STA.
(Id. at 5.) STA and WPT expect to close the proposed acquisition in the
fourth quarter of 2024. (Id. at 4.)
Under 49 U.S.C. 14303(b), the Board must approve and authorize a
transaction that it finds consistent with the public interest, taking
into consideration at least (1) the effect of the proposed transaction
on the adequacy of transportation to the public, (2) the total fixed
charges that result from the proposed transaction, and (3) the interest
of affected carrier employees. Applicants have submitted the
information required by 49 CFR 1182.2, including information to
demonstrate that the proposed transaction is consistent with the public
interest under 49 U.S.C. 14303(b), see 49 CFR 1182.2(a)(7), and a
jurisdictional statement under 49 U.S.C. 14303(g) that the aggregate
gross operating revenues of STA and WPT exceeded $2 million during the
12-month period immediately preceding the filing of the application,
see 49 CFR 1182.2(a)(5). (See Appl. 6-7.)
[[Page 73742]]
Applicants assert that the transaction is consistent with the
public interest. Applicants state that STA's operating subsidiaries and
WPT have contractual obligations to provide outsourced transportation
services and a competitive incentive to maintain and improve existing
services because doing so enhances their chances of success when new
outsourcing opportunities arise or when existing contracts are re-
competed. (Id.) According to Applicants, contract renewals in the
school transportation sector often involve highly visible and intense
negotiation processes between multiple bidders, governmental bodies,
unions, political activists and other interested parties. (Id. at 6.)
Thus, Applicants claim that STA will have ``strong incentives to
maintain high service levels in order to fend off competitive bids''
from other bus transportation providers. (Id.) Applicants also note
that STA's operating subsidiaries will face competition from school
districts and local government entities that can provide bus
transportation ``in-house.'' (Id.)
With respect to fixed charges, Applicants state that there are no
current plans to finance the proposed acquisition in a manner that
would affect fixed charges payable by STA or its affiliates. (Id.)
Applicants further note that funding for the transaction ``will be
drawn from STA's current credit facility, and WPT (like other STA
subsidiaries) will become a co-obligor under that facility.'' (Id.)
Regarding the effect of the acquisition on current employees,
Applicants state that it is highly unlikely that any employees of WPT
would be adversely affected to any significant degree by the proposed
transaction. (Id. at 7.) They again emphasize STA and WPT's contractual
obligations and competitive incentives to maintain and improve existing
services, and claim that STA and WPT ``do not have, and rationally
could not have, any intention of significantly reducing employment
levels involving drivers, dispatchers or vehicle maintenance
personnel'' as a result of the acquisition. (Id.) Applicants further
state that there is a ``longstanding shortage of qualified drivers and
maintenance personnel,'' and assert that STA continues to actively
recruit additional employees. (Id.)
Based on Applicants' representations, the Board finds that the
acquisition as proposed in the application is consistent with the
public interest and should be tentatively approved and authorized. If
any opposing comments are timely filed, these findings will be deemed
vacated, and, unless a final decision can be made on the record as
developed, a procedural schedule will be adopted to reconsider the
application. See 49 CFR 1182.6. If no opposing comments are filed by
expiration of the comment period, this notice will take effect
automatically and will be the final Board action.
This action is categorically excluded from environmental review
under 49 CFR 1105.6(c).
Board decisions and notices are available at www.stb.gov.
It is ordered:
1. The proposed transaction is approved and authorized, subject to
the filing of opposing comments.
2. If opposing comments are timely filed, the findings made in this
notice will be deemed vacated.
3. This notice will be effective October 29, 2024, unless opposing
comments are filed by October 28, 2024. If any comments are filed,
Applicants may file a reply by November 12, 2024.
4. A copy of this notice will be served on: (1) the U.S. Department
of Transportation, Federal Motor Carrier Safety Administration, 1200
New Jersey Avenue SE, Washington, DC 20590; (2) the U.S. Department of
Justice, Antitrust Division, 10th Street & Pennsylvania Avenue NW,
Washington, DC 20530; and (3) the U.S. Department of Transportation,
Office of the General Counsel, 1200 New Jersey Avenue SE, Washington,
DC 20590.
Decided: September 5, 2024.
By the Board, Board Members Fuchs, Hedlund, Primus, and Schultz.
Regena Smith-Bernard,
Clearance Clerk.
[FR Doc. 2024-20421 Filed 9-10-24; 8:45 am]
BILLING CODE 4915-01-P