[Federal Register Volume 84, Number 36 (Friday, February 22, 2019)]
[Notices]
[Pages 5802-5804]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-03115]


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SURFACE TRANSPORTATION BOARD

[Docket No. MCF 21084]


Variant Equity I, LP, and Project Kenwood Acquistion, LLC--
Acquisition of Control--Coach USA Administration, Inc., and Coach USA, 
Inc.

AGENCY: Surface Transportation Board.

ACTION: Notice tentatively approving and authorizing finance 
transaction.

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SUMMARY: On December 20, 2018, Variant Equity I, LP (Variant), and 
Project Kenwood Acquisition, LLC (collectively, Applicants), both 
noncarriers, jointly filed an application to acquire from SCUSI Limited 
100% of the stock in Coach USA Administration, Inc., a noncarrier that 
owns 100% of Coach USA, Inc., another noncarrier, that controls 29 
motor passenger carriers that hold federally-issued interstate 
operating authority. The Board is tentatively approving and authorizing 
the transaction,\1\ 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.
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    \1\ Due to the partial shutdown of the Federal government from 
December 22, 2018, through January 25, 2019, the Board was not able 
to act within the period set forth in 49 U.S.C. 14303(c). On January 
28, 2019, Applicants filed a motion seeking expedited review of the 
application and publication of a notice in the Federal Register. On 
January 30, 2019, Stagecoach Group plc filed a reply in support of 
Applicants' motion to expedite.

DATES: Comments must be filed by April 8, 2019. Applicants may file a 
reply by April 23, 2019. If no opposing comments are filed by April 8, 
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2019, this notice shall be effective on April 9, 2019.

ADDRESSES: Send an original and 10 copies of any comments referring to 
Docket No. MCF 21084 to: Surface Transportation Board, 395 E Street SW, 
Washington, DC 20423-0001. In addition, send one copy of comments to 
Applicants' Representative: Matthew J. Warren, Sidley Austin LLP, 1501 
K Street NW, Washington DC 20005.

FOR FURTHER INFORMATION CONTACT: Matthew Bornstein at (202) 245-0385. 
Assistance for the hearing impaired available through the Federal 
Information Relay Service (FIRS) at 1-800-877-8339.

SUPPLEMENTARY INFORMATION: Applicants explain that Variant is a private 
equity firm organized under the laws of the State of Delaware. (Appl. 
2.) It controls 100% of the equity and vote of Project Kenwood 
Acquisition, LLC, which is also organized under the laws of the State 
of Delaware. Applicants assert that neither Variant nor any entity 
currently under its control holds motor carrier authority or a U.S. 
Department of Transportation number or safety rating.\2\ (Id.)
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    \2\ Applicants state that Variant controls multiple assets, 
including Curb Mobility, which provides a comprehensive mobility 
platform that serves taxi and other for-hire ride operators, 
regulators, service providers, and riders. (Appl. 2.)
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    Applicants state that Coach USA, Inc., which is a Delaware 
corporation, controls 29 motor passenger carriers that hold federally 
issued interstate operating authority \3\ and operate, in total, 
approximately 2,213 buses.\4\

[[Page 5803]]

Coach USA, Inc., is a wholly owned subsidiary of Coach USA 
Administration, Inc., a Nevada corporation. (Id. at 3-4.) All the 
equity interests in Coach USA Administration, Inc., are held by SCUSI 
Limited, a public limited holding company organized under the laws of 
England and Wales. Stagecoach Group plc is the ultimate parent of SCUSI 
Limited and is organized under the laws of Scotland. (Id. at 3.) \5\
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    \3\ A 30th Coach USA-owned carrier, Community Transportation, 
Inc., operates only on intrastate routes in New Jersey. (See id. at 
6.)
    \4\ This figure is derived from Exhibit 1 of the verified 
application, which lists, among other things, the approximate number 
of buses operated by each Coach USA carrier with active federal 
operating authority.
    \5\ The Board has approved several acquisitions by Stagecoach 
Group plc and Coach USA, Inc., the most recent of which was in 
Stagecoach Group plc--Acquisition of Control of Assets--American 
Coach Lines of Atlanta, Inc., MCF 21045 (STB served Aug. 15, 2012).
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    The 29 interstate motor carriers are described in Exhibit 1 of the 
application as follows: \6\
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    \6\ Additional information about the motor carriers, including 
USDOT numbers and motor carrier numbers, can be found in the 
application.
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     Airport Supersaver Inc., which primarily operates in 
Illinois;
     All West Coachlines, Inc., which primarily operates in 
California and Nevada;
     American Coach Lines of Atlanta, Inc., which primarily 
operates in Georgia, Florida, Alabama, and South Carolina;
     Butler Motor Transit, Inc., which primarily operates in 
Pennsylvania, New Jersey, New York, and Michigan;
     Central Cab Company which primarily operates in 
Pennsylvania, Ohio, and West Virginia;
     Chenango Valley Bus Lines., Inc., which primarily operates 
in New Jersey, New York, and Pennsylvania;
     Community Coach, Inc., which primarily operates in New 
Jersey, New York, Ohio, and Pennsylvania;
     Community Transit Lines, Inc., which primarily operates in 
New Jersey;
     Dillon's Bus Service, Inc., which primarily operates in 
Maryland, Virginia, and the District of Columbia;
     Elko, Inc., which primarily operates in Nevada;
     Hudson Transit Lines, Inc., which primarily operates in 
New Jersey, New York, and Pennsylvania;
     Independent Bus Company, Inc., which primarily operates in 
New Jersey;
     Kerrville Bus Company, Inc., which primarily operates in 
Texas, Arkansas, and Louisiana;
     Lakefront Lines, Inc., which primarily operates in 
Illinois, Indiana, Ohio, Pennsylvania, Michigan, Tennessee, and New 
York;
     Megabus Northeast, LLC, which primarily operates in 
Connecticut, the District of Columbia, Georgia, Massachusetts, 
Maryland, North Carolina, New Jersey, New York, Ohio, Pennsylvania, 
Rhode Island, Virginia, West Virginia, and Maine;
     Megabus Southeast, LLC, which primarily operates in 
Alabama, the District of Columbia, Florida, Georgia, Kentucky, 
Louisiana, North Carolina, Tennessee, and Virginia;
     Megabus Southwest, LLC, which primarily operates in 
Arkansas, Texas, Louisiana, Tennessee, and Missouri;
     Megabus West, LLC, which primarily operates in California 
and Nevada;
     Olympia Trails Bus Company, Inc., which primarily operates 
in New Jersey and New York;
     Orange, Newark, Elizabeth Bus, Inc., which primarily 
operates in New Jersey;
     Pacific Coast Sightseeing Tours & Charters, Inc., which 
primarily operates in California and Nevada;
     Powder River Transportation Services, Inc., which 
primarily operates in Wyoming and Montana;
     Rockland Coaches, Inc., which primarily operates in New 
York and New Jersey;
     Sam Van Galder, Inc., which primarily operates in 
Wisconsin, Illinois, and Minnesota;
     Suburban Trails, Inc., which primarily operates in New 
Jersey and New York;
     Transportation Management Services, Inc. (d/b/a Lenzner 
Coach Lines), which primarily operates in Pennsylvania;
     Trentway-Wagar, Inc., which primarily operates in New York 
and Canada;
     Tri-State Coach Lines Inc., is not currently operating; 
and
     Wisconsin Coach Lines, Inc., which primarily operates in 
Wisconsin and Illinois.
    Applicants state that the purpose of the transaction is to transfer 
the ultimate ownership of the 29 carriers from Stagecoach Group plc and 
SCUSI Limited to Variant. Variant seeks to acquire the carriers as an 
investment and plans to manage the assets with the goal of continuing 
to provide safe and reliable motor passenger transportation, while at 
the same time improving long-term value. (Appl. 1.)
    Under 49 U.S.C. 14303(b), the Board must approve and authorize a 
transaction subject to section 14303 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. Applicants have submitted 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 statement that the 
aggregate gross operating revenues of the involved carriers exceeded $2 
million during the preceding 12-month period. See 49 U.S.C. 
14303(g).\7\
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    \7\ Parties must certify that the transaction involves carriers 
whose aggregate gross operating revenues exceed $2 million, as 
required under 49 CFR 1182.2(a)(5).
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    Applicants assert that the proposed transaction would have a 
positive effect on the adequacy of transportation services for the 
public. They state that, at the current time, Variant has no intention 
of materially altering the nature, extent, or frequency of the service 
provided by the 29 motor carriers. (Appl. 12.) Applicants state that 
the carriers would continue to operate as they have been with their 
existing names and trade names, but under new ultimate ownership. 
Applicants further state that Variant would use its management 
experience to enhance the carriers' overall financial viability while 
providing safe and quality service to customers. (Id.)
    Applicants argue that the proposed transaction would have no 
negative impact on competition because Variant is not a carrier and 
does not own or control any carriers. (Id.) They assert that there 
would be continued competition in each of the categories of service 
provided by the carriers because they would continue to face actual and 
potential competition from numerous modes of transportation, including 
competing bus services, automobiles, and more. (Id. at 12-13.)
    Applicants state that the proposed transaction would increase fixed 
charges, in the form of interest expense, because funds would be 
borrowed to assist in financing the transaction. (Id. at 13.) They 
claim, however, that such an increase would not affect the provision of 
transportation services to the public. Applicants also cite to Sureride 
Charter, Inc.--Acquisition of Control--McClintock Enterprises, Inc., 
MCF 21077 (STB served Nov. 2, 2017), where the Board approved a 
transaction envisioning debt financing and the possibility of an 
increase in interest expenses.
    Regarding the interests of employees, Applicants claim that there 
would be no material effect on employee or labor conditions because the 
proposed transaction does not envision any immediate change in the day-
to-day operations of the carriers that could

[[Page 5804]]

negatively impact employees. (Appl. 14.)
    The Board finds that the acquisition 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(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 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 April 9, 2019, unless opposing 
comments are filed by April 8, 2019.
    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: February 15, 2019.

    By the Board, Board Members Begeman, Fuchs, and Oberman.
Jeffrey Herzig,
Clearance Clerk.
[FR Doc. 2019-03115 Filed 2-21-19; 8:45 am]
 BILLING CODE 4915-01-P