[Federal Register Volume 81, Number 145 (Thursday, July 28, 2016)]
[Notices]
[Pages 49712-49714]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-17887]


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SURFACE TRANSPORTATION BOARD

[Docket No. MCF 21070]


SunTx Capital III Management Corp., et al.--Control--TBL Group, 
Inc.; GBJ, Inc.; Echo Tours and Charters L.P.

AGENCY: Surface Transportation Board.

ACTION: Notice tentatively approving and authorizing finance 
transaction.

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SUMMARY: On June 28, 2016, SunTx Capital III Management Corp. (SunTx 
III), SunTx Capital Partners III GP, LP (SunTx GP), SunTx TBL Logistics 
Management Holdings, LP (SunTx Holdings), and TBL Logistics Management, 
LLC (TBL Logistics), along with TBL Group, Inc. (TBL Group) and the 
motor carriers of passengers it controls, GBJ, Inc. (GBJ) and Echo 
Tours and Charters L.P. (Echo) (collectively, Applicants) filed an 
application under 49 U.S.C. 14303 to acquire control of TBL Group, GBJ, 
and Echo. Concurrently with their application, the parties also filed a 
request for interim approval under 49 U.S.C. 14303(i). In a decision 
served on July 28, 2016 in related Docket No. MCF 21070 TA, interim 
approval was granted, effective on the service date of that decision. 
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. Persons wishing to oppose the application must follow the 
rules at 49 CFR 1182.5 and 1182.8.

DATES: Comments must be filed by September 12, 2016. Applicants may 
file a reply by September 26, 2016. If no comments are filed by 
September 12,

[[Page 49713]]

2016, this notice shall be effective on September 13, 2016.

ADDRESSES: Send an original and 10 copies of any comments referring to 
Docket No. MCF 21070 to: Surface Transportation Board, 395 E Street 
SW., Washington, DC 20423-0001. In addition, send one copy of comments 
to Applicants' representatives: Richard P. Schweitzer, Richard P. 
Schweitzer, P.L.L.C., 1717 K Street NW., Suite 900, Washington, DC 
20006 (attorney for TBL Group, GBJ, and Echo) and Thomas J. Litwiler, 
Fletcher & Sippel LLC, 29 North Wacker Drive, Suite 920, Chicago, IL 
60606-2832 (attorney for SunTx III, SunTx GP, SunTx Holdings, and TBL 
Logistics).

FOR FURTHER INFORMATION CONTACT: Allison Davis (202) 245-0378. Federal 
Information Relay Service (FIRS) for the hearing impaired: 1-800-877-
8339.

SUPPLEMENTARY INFORMATION: Applicants assert the following facts. SunTx 
III, a noncarrier Texas corporation, is a general partner of SunTx GP, 
a noncarrier Texas limited partnership, which is, in turn, the general 
partner of SunTx Holdings, also a noncarrier Texas limited partnership. 
SunTx III, SunTx GP, and SunTx Holdings are components of SunTx Capital 
Partners, a private equity firm that invests in middle market 
manufacturing, distribution, and service companies. TBL Logistics is a 
newly formed noncarrier Delaware holding company. TBL Group is a 
noncarrier Texas corporation that owns and controls two federally 
regulated motor carriers of passengers: Echo d/b/a Echo Transportation 
(MC-755212) and GBJ d/b/a AFC Transportation (MC-369531).\1\ Echo and 
GBJ, both incorporated in Texas, each own equal shares of TBL Group 
stock. TBL Group holds 100% of the stock of Echo and GBJ. Echo has been 
operating since 2011 and provides interstate charter, tour, limousine, 
school bus, and local city shuttle transportation in the Dallas, Fort 
Worth, Tyler, San Angelo, and Waco markets. GBJ has been operating for 
24 years and provides interstate charter transportation, local city 
shuttle service, and sedan service in the Houston metropolitan area. 
GBJ operates motorcoaches, minibuses, transit buses, sedans, and 
limousines.
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    \1\ In 2014, the Board authorized Texas Bus and Limo Acquisition 
Corp. (now known as TBL Group) to acquire control of five motor 
carriers of passengers. Tex. Bus & Limo Acquis. Corp.--Control--GBJ, 
Inc., MCF 21058 (STB served July 9, 2014). Applicants state that, 
ultimately, only the acquisitions of GBJ and Echo were consummated.
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    Applicants seek Board authority for control of TBL Group, Echo, and 
GBJ through the creation of TBL Logistics. Specifically, Applicants 
state that, as a result of this transaction, TBL Logistics would own 
TBL Group through which TBL Logistics would control Echo and GBJ. TBL 
Logistics would be owned 80.1% by SunTx Holdings and 19.9% by TBL 
Group.
    Applicants assert that, as a result of the proposed transaction, 
Echo and GBJ would benefit from financing that would enable them to 
purchase additional vehicles to upgrade the combined fleet. Applicants 
state that vehicles that average more than 12 years of age would be 
replaced with newer, safer, and more reliable vehicles that would offer 
better utilization factors, higher fuel economy, and lower emissions, 
and would provide the public with safer, more cost effective and 
environmentally responsible transportation. Applicants further state 
that the infusion of capital would allow Echo and GBJ to expand their 
service offerings in their existing markets and explore the possibility 
of offering service in new markets as well.
    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 affected by the proposed transaction. 
Applicants submitted information, as 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), and a 
statement that the aggregate gross operating revenues of Echo and GBJ 
exceeded $2 million for the preceding 12-month period under 49 U.S.C. 
14303(g).\2\
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    \2\ Applicants with gross operating revenues exceeding $2 
million are required to meet the requirements of 49 CFR 1182.
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    With respect to adequacy of transportation to the public, 
Applicants submit that the proposed transaction would not result in 
significant changes to the operations of Echo and GBJ. Applicants state 
that the proposed transaction would allow the companies to take 
advantage of better financial terms, which would allow them to replace 
aging vehicles on favorable terms. Applicants anticipate more efficient 
and effective service in each of the markets and that the transaction 
would enable Echo and GBJ to leverage the new investment to provide the 
same or greater level of transportation to the public. With respect to 
fixed charges, Applicants assert that the capital investment will lower 
interest payments on existing debt and allow them to secure attractive 
terms for additional financing of equipment acquisitions. Applicants 
also state that the proposed transaction would not have an overall 
negative impact on employees because, over time, the carriers would be 
able to grow by taking advantage of economies of scale, better 
financial terms, and increased buying power, which would result in 
increased service and additional personnel.
    Applicants further claim that the proposed transaction would not 
have a material adverse effect on competition because Echo and GBJ do 
not plan on significantly altering their current operations, but would 
be taking advantage of efficiencies gained through improved capital 
financing. Applicants states that the areas served by Echo and GBJ have 
robust carrier competition. Specifically, in North Texas, Echo controls 
less than 10% of the charter, tour, shuttle, livery school, metro, and 
scheduled ground transportation market. Similarly, in South Texas, GBJ 
controls less than 10% of the charter, tour, shuttle, livery school, 
metro, and scheduled ground transportation market. Applicants note that 
areas served by the two motor carriers are largely separate and 
distinct, with a small amount of overlap in the larger markets. 
Applicants assert that the benefits associated with the transaction 
would only support increased competition. Applicants further reiterate 
the Board's findings in other cases regarding low barriers to entry 
into the interstate bus industry.
    The Board finds that the proposed acquisition described 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(c). If no opposing comments are filed by the expiration of the 
comment period, this notice will take effect automatically and will be 
the final Board action. Board decisions and notices are available on 
our Web site at WWW.STB.DOT.GOV.
    This action is categorically excluded from environmental review 
under 49 CFR 1105.6(c).
    It is ordered:
    1. The proposed transaction is approved and authorized, subject to 
the filing of opposing comments.

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    2. If opposing comments are timely filed, the findings made in this 
notice will be deemed vacated.
    3. This notice will be effective September 13, 2016, unless 
opposing comments are filed by September 12, 2016.
    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: July 25, 2016.

    By the Board, Chairman Elliott, Vice Chairman Miller, and 
Commissioner Begeman.
Brendetta S. Jones,
Clearance Clerk.
[FR Doc. 2016-17887 Filed 7-27-16; 8:45 am]
BILLING CODE 4915-01-P