Exited Portfolio Companies - Student Transportation of America, Inc.
Student Transportation of America, Inc. School bus transportation services
BUSINESS: Student Transportation of America (STA) is one of North America's largest providers of contracted school transportation and management services, with over 4,000 vehicles operating in 68 locations in 10 states and one Canadian province.
TRANSACTION: In October 2001 Wynnchurch purchased a minority equity interest in STA, which had been founded in Howell, NJ in 1997. Wynnchurch's investment provided the equity base to effect an $87 million recapitalization of the company.
CHALLENGE: STA's strong business model for geographic expansion required a substantial infusion of capital to take advantage of nationwide market opportunities.
OPPORTUNITY: CEO Denis Gallagher, who had led STA since its founding, had established an experienced management team with a proven ability to grow STA in new markets through multiple acquisitions and by winning business through bid contracts from school districts and converting fleets that are owned and managed by school districts.
STRATEGY: STA had experienced strong historical revenue and EBITDA growth through a successful acquisition, bid and conversion strategy. Wynnchurch's equity investment provided the financial support to continue building an industry-leading company.
RESULT: In December of 2004, affiliated entities of STA completed an initial public offering of income participating securities (IPSs) on the Toronto Stock Exchange. The total gross proceeds of the offering were CA$127.6 million — giving STA the capital it needed to take advantage of expansion opportunities. In conjunction with the offering, Wynnchurch realized a multiple of our invested capital while still retaining both a minority interest and a board seat.