[Federal Register Volume 81, Number 209 (Friday, October 28, 2016)]
[Notices]
[Pages 75181-75183]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-26103]


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SURFACE TRANSPORTATION BOARD

[Docket No. MCF 21071]


AAAHI Acquisition Corporation--Acquisition of Control--All Aboard 
America! Holdings, Inc., Ace Express Coaches, LLC, All Aboard America! 
School Transportation, LLC, All Aboard Transit Services, LLC, Hotard 
Coaches, Inc., Industrial Bus Lines, Inc. d/b/a All Aboard America, and 
Sureride Charter Inc. d/b/a Sundiego Charter Co.

AGENCY: Surface Transportation Board.

ACTION: Notice tentatively approving and authorizing finance 
transaction.

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SUMMARY: On September 29, 2016, AAAHI Acquisition Corporation (AAC), a 
noncarrier, filed an application under 49 U.S.C. 14303 for AAC to 
acquire All Aboard America! Holdings, Inc. (AAAHI), a noncarrier 
holding company that wholly owns passenger motor carriers Hotard 
Coaches, Inc. (Hotard), Industrial Bus Lines, Inc. d/b/a All Aboard 
America (Industrial), Sureride Charter Inc. d/b/a Sundiego Charter Co. 
(Sundiego), Ace Express Coaches, LLC (Ace Express), All Aboard Transit 
Services, LLC (AATS), and All Aboard America! School Transportation, 
LLC (AAAST) (collectively Acquisition Carriers). 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 December 12, 2016. The applicant may 
file a reply by December 27, 2016. If no opposing comments are filed by 
December 12, 2016, this notice shall be effective December 13, 2016.

ADDRESSES: Send an original and 10 copies of any comments referring to 
Docket No. MCF 21071 to: Surface Transportation Board, 395 E Street 
SW., Washington, DC 20423-0001. In addition, send one copy of comments 
to

[[Page 75182]]

AAC's representative: Andrew K. Light, Scopelitis, Garvin, Light, 
Hanson, & Feary, P.C., 10 W. Market Street, Suite 1500, Indianapolis, 
IN 46204.

FOR FURTHER INFORMATION CONTACT: Amy Ziehm (202) 245-0391. Federal 
Information Relay Service (FIRS) for the hearing impaired: 1-800-877-
8339.

SUPPLEMENTARY INFORMATION: AAC states that it is a noncarrier Delaware 
corporation that is wholly owned by AAAHI Intermediate Holdings LLC, 
which is wholly owned by AAAHI Topco Corporation, which is in turn 
wholly owned by AAAHI Holdings LLC. According to AAC, the majority 
owner of AAAHI Holdings LLC is Tensile-AAAHI Holdings LLC, and the 
majority holder of Tensile-AAAHI Holdings LLC is Tensile Capital 
Partners Master Fund LP. AAC states that Tensile Capital Partners LP 
owns 89.6% of Tensile Capital Partners Master Fund LP. AAC further 
states that AAC and the above-named entities in its ownership chain 
(Ownership Entities) do not possess motor carrier authority, do not 
have USDOT Numbers or Safety Ratings, and do not have any direct or 
indirect ownership interest in any interstate or intrastate passenger 
motor carriers.
    AAC states that each of the Acquisition Carriers is a direct wholly 
owned subsidiary of AAAHI, and AAAHI's plurality shareholder is 
Celerity AHI Holdings SPV, LLC (Celerity Holdings). According to AAC, 
Celerity Holdings is a consortium of corporate and institutional 
investors along with Celerity Partners IV, LLC, a private equity firm 
that also acts as the managing member of Celerity Holdings. AAC states 
that other capital providers (including Gemini Investors V, L.P., a 
private equity firm) do not participate in Celerity Holdings but do 
hold minority interests in AAAHI directly. None of AAAHI's investors 
currently hold a controlling interest in any regulated bus 
transportation provider other than the Acquisition Carriers. According 
to AAC, the Acquisition Carriers exercise substantial independence in 
running their diverse operations.
    AAC provides a description of each of the Acquisition Carriers, as 
summarized below:
     Hotard is a Louisiana corporation that provides local and 
regional charter services within Louisiana and Mississippi, and to and 
from various points in the continental United States. It holds common 
carrier operating authority from the Federal Motor Carrier Safety 
Administration (FMCSA) as a motor carrier of passengers (MC-143881). 
Hotard operates a fleet of 240 vehicles, of which 79 are full-sized 
motor coaches and the remainder are mid-sized buses, minibuses, and 
school buses. The school buses are mainly used for employee shuttle 
services under contract with large employers, operating interstate 
between Texas and Louisiana and intrastate within Louisiana.
     Industrial is a New Mexico corporation that provides local 
and regional charter services in Arizona, New Mexico, and Texas. 
Industrial holds common carrier operating authority from FMCSA as a 
motor carrier of passengers (MC-133171). Its fleet consists of 80 full-
sized motor coaches and 10 minibuses.
     Sundiego is a California corporation that operates a fleet 
of 72 full-sized motor coaches and 8 minibuses. It holds common carrier 
operating authority from FMCSA as a motor carrier of passengers (MC-
324772). Sundiego provides local and regional charter, tour, and 
contract shuttles services from its base in National City, Cal., and 
from satellite locations in San Marcos and Anaheim, Cal.
     Ace Express is a Delaware limited liability company with 
its principal place of business in Golden, Colo. Ace Express operates 
charter, contract, and casino services. It holds common carrier 
operating authority from FMCSA as a motor carrier of passengers (MC-
908184). Ace Express provides charter services with its fleet of 57 
motor coaches and 17 minibuses. Other services are provided on a 
contract basis for corporate and municipal clients.
     AATS is a Delaware limited liability company with its 
principal place of business in Commerce City, Colo. It provides 
paratransit services under a contract with Denver Rapid Transit 
District (RTD). AATS operates 80 paratransit vehicles that are provided 
by RTD. AATS provides the drivers, maintenance of vehicles, and 
supervision of employees involved in the paratransit service. AATS does 
not conduct interstate passenger operations and thus does not hold 
passenger carrier operating authority from FMCSA. AATS does not possess 
Colorado intrastate passenger carrier authority, as its operations are 
exempt from the need for such authority. See Colo. Rev. Stat. 40-10.1-
105(e) (2011).
     AAAST is a Texas limited liability company that provides 
transportation for school children under contract with a number of 
school districts in Texas. The school districts typically provide the 
school buses and AAAST provides the drivers, maintenance of vehicles, 
and supervisions of employees. AAAST currently operates 72 buses for 
five school districts. AAAST does not conduct interstate passenger 
operations and thus does not hold passenger carrier operating authority 
from FMCSA. AAAST does not possess Texas intrastate passenger carrier 
authority, as all of the school bus operations in which AAAST 
participates are exempt from state regulation. See Tex. Transp. Code 
Ann. 643.002(4), (6) (West 2007).
    AAC explains that under the proposed transaction, AAC would acquire 
the ownership interest of AAAHI, the effect of which would be to place 
the Acquisition Carriers under the control of AAC. AAC states that it 
will assume indirect 100% control of the Acquisition Carriers.
    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; and (3) the interest of affected carrier 
employees. AAC has 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) and a 
statement that the gross operating revenues of AAC and its motor 
carrier affiliated companies exceeded $2 million for the preceding 12-
month period. See 49 U.S.C. 14303(g).\1\
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    \1\ Applicants with gross operating revenues exceeding $2 
million are required to meet the requirements of 49 CFR 1182.
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    AAC asserts that this acquisition is in the public interest. AAC 
states that services currently provided by the Acquisition Carriers 
would continue to be provided under the same names currently used to 
provide such services. AAC further explains that it anticipates that 
services to the public would be improved, because the Acquisition 
Carriers would continue to operate, but in the future they would 
operate as part of the AAC corporate family. Under this new ownership, 
AAC states that it intends to use its business and financial management 
skills, as well as its capital, to increase the efficiencies and 
enhance the viability of the Acquisition Carriers, thereby ensuring the 
continued availability of adequate passenger transportation service for 
the public.
    AAC states that there are no fixed charges associated with the 
proposed transaction or the proposed acquisition of control. In 
addition, according to AAC, the proposed transaction would have no 
material impact on employees or labor conditions, as AAC intends to 
continue the existing operations of the Acquisition Carriers and does 
not

[[Page 75183]]

anticipate a measurable reduction in force or changes in compensation 
levels or benefits.
    AAC also claims that neither competition nor the public interest 
would be adversely affected, as the proposed transaction involves 
merely a transfer of one holding company to another holding company. 
AAC states that, because it does not currently have any ownership 
interest in any passenger motor carrier, there would be no net gain in 
market power with respect to the Acquisition Carriers under the 
proposed transaction. Furthermore, AAC states that the bus operations 
of the Acquisition Carriers are geographically dispersed and there is 
little or no overlap in service areas or in customer base. Thus, AAC 
states that the impact of the proposed transaction on the regulated 
motor carrier industry would be minimal and that neither competition 
nor the public interest would be adversely affected.
    On the basis of the application, the Board finds that the proposed 
acquisition 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.
    This action is categorically excluded from environmental review 
under 49 CFR 1105.6(c).
    Board decisions and notices are available on our Web site 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 as having been vacated.
    3. This notice will be effective December 13, 2016, unless opposing 
comments are filed by December 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: October 25, 2016.

    By the Board, Chairman Elliott, Vice Chairman Miller, and 
Commissioner Begeman.
Marline Simeon,
Clearance Clerk.
[FR Doc. 2016-26103 Filed 10-27-16; 8:45 am]
BILLING CODE 4915-01-P