[Federal Register Volume 88, Number 3 (Thursday, January 5, 2023)]
[Notices]
[Pages 898-899]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-28607]


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SURFACE TRANSPORTATION BOARD

[Docket No. MCF 21103]


Transdev Group, S.A.--Acquisition of Control--First Transit 
Topco, Inc.

AGENCY: Surface Transportation Board.

ACTION: Notice tentatively approving and authorizing finance 
transaction.

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SUMMARY: Transdev Group, S.A. (Transdev), a noncarrier, its noncarrier 
subsidiary Transdev North America, Inc. (TNA), and TNA's carrier 
subsidiary Transdev Services, Inc. (TSI) (collectively, Applicants) 
have filed an application for TNA to acquire all voting securities of 
noncarrier First Transit Topco Inc. (Topco), and thereby acquire 
control of a Topco subsidiary, First Transit, Inc. (FT), an interstate 
passenger motor carrier, from Recess Holdco LLC, a noncarrier affiliate 
of FT. The Board is tentatively approving and authorizing this 
transaction. If no opposing comments are timely filed, this notice will 
be the final Board action.

DATES: Comments must be filed by February 21, 2023. If any comments are 
filed, Applicants may file a reply by March 6, 2023. If no opposing 
comments are filed by February 21, 2023, this decision will be final on 
February 22, 2023.

ADDRESSES: Comments may be filed with the Board either via e-filing on 
the Board's website or mailing to the Board's offices. Comments may be 
e-filed at www.stb.gov/proceedings-actions/e-filing/other-filings/ and 
must reference Docket No. MCF 21103. Mailed comments may be sent to: 
Surface Transportation Board, 395 E Street SW, Washington, DC 20423-
0001. In addition, one copy of comments must be sent to Applicants' 
representative: Mark J. Andrews, Clark Hill PLC, 1001 Pennsylvania 
Avenue NW, Suite 1300 South, Washington, DC 20004.

FOR FURTHER INFORMATION CONTACT: Jonathon Binet at (202) 245-0368. 
Assistance for the hearing impaired is available through the Federal 
Relay Service at (800) 877-8339.

SUPPLEMENTARY INFORMATION: According to the application,\1\ Transdev is 
under the majority ownership of Caisse des depots et consignations, a 
French public-sector financial institution, and the minority ownership 
of Rethmann Group, a family-owned German company.\2\ (Appl. 6.) 
Transdev does not have interstate carrier authority. (See id. at 2 
(stating that Transdev is a noncarrier).) Transdev controls TNA,\3\ a 
noncarrier that controls interstate motor carrier TSI and its two 
interstate motor carrier subsidiaries, Pittsburgh Transportation Group 
Charter Services and SFO Airporter, Inc.\4\ (Id. at 2, 4; Suppl. 4.) 
Applicants state that Transdev is generally engaged in providing 
contract-based passenger transportation services to transit 
authorities, other governmental agencies, corporations, educational 
institutions, and healthcare facilities wishing to outsource such 
transportation services. (Appl. 6; see also Suppl. Ex. C (identifying 
Transdev Clients, Locations, Equipment, and Employees.) According to 
Applicants, TSI and its carrier affiliates perform a very small amount 
of charter work, representing less than .0054% of Transdev's total U.S. 
business, in San Marcos, Tex., San Jose, Cal., and Pittsburgh, Pa. 
(Suppl. 4-5.)
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    \1\ The application initially was filed on November 10, 2022. On 
December 6, 2022, Applicants filed a supplement to the application. 
Therefore, for purposes of determining the procedural schedule and 
statutory deadlines, the filing date of the application is December 
6, 2022. See 49 CFR 1182.4(a).
    \2\ More information about Transdev's corporate structure and 
ownership can be found in the application and the supplement. (See 
Appl. 6; Suppl. Ex. A.)
    \3\ TNA was formerly known as Veolia Transportation.
    \4\ Further information about these motor carriers, including 
U.S. Department of Transportation (USDOT) numbers, motor carrier 
numbers, and USDOT safety fitness ratings, can be found in the 
application. (See Appl. 4.)
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    The application explains that under this transaction, all voting 
securities of Topco would be acquired by TNA, and Topco would become a 
direct subsidiary of TNA and an indirect subsidiary of Transdev. (Appl. 
2, 6.) Topco, a noncarrier, is an intermediate parent company of FT,\5\ 
a passenger motor carrier that controls various noncarrier 
subsidiaries.6 7 (Id. at 2.) According to the application, 
FT and certain noncarrier FT affiliates (collectively, the FT entities) 
transport 300 million passengers annually to and from approximately 300 
locations across North America, utilizing approximately 12,000 
vehicles. (Id. at 5; see also Suppl. Ex. E, First Transit Customer 
Location and Fleet Report; id., Ex. G, First Transit Employee Locations 
by State.) FT provides essential mobility services including fixed 
route bus services, paratransit, shuttle bus services, and

[[Page 899]]

vehicle maintenance services. (Appl. 4.) Applicants state that FT's 
contract customers include state and local transit agencies, as well as 
other governmental agencies, airports, and private institutions. (Id.; 
see also Suppl. Ex. E.) The application explains that FT holds 
operating authority from FMCSA because it occasionally conducts 
regulated interstate charter operations when its vehicles and drivers 
are not engaged in its primary business of contract transit services. 
(Appl. 4.) According to the application, FT also engages in regulated 
intrastate transportation in California, Rhode Island, and the 
Washington, DC metropolitan area. (Id. at 4-5.) TNA's acquisition of 
Topco's voting securities would make FT a direct subsidiary of TNA and 
an indirect subsidiary of Transdev. (Id. at 6.)
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    \5\ Transdev also would acquire control of various noncarrier 
subsidiaries of FT. With respect to the acquisition of the non-
regulated FT subsidiaries, the appropriate filing was made under the 
Hart-Scott-Rodino Antitrust Improvements Act of 1976, 15 U.S.C. 18a 
(HSR). (Appl. 3 n.2.) On December 12, 2022, Applicants filed a 
letter stating that the HSR 30-day period has expired without any 
action being taken and, accordingly, the HSR process has concluded.
    \6\ The indirect beneficial owners of FT are EQT Infrastructure 
V Collect EUR SCSp and EQT Infrastructure V Collect USD SCSp 
(collectively, EQT). EQT's control of FT was approved by the Board 
in EQT Infrastructure V Collect EUR SCSp--Acquisition of Control--
First Student, Inc., MCF 21093 (STB served May 21, 2021).
    \7\ More information about Topco's corporate structure and 
ownership can be found in the application and the supplement. (See 
Appl. 2-3; Suppl. Ex. B.)
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    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 resulting from the proposed transaction, and (3) the interest 
of affected carrier employees. Applicants have submitted information 
required by 49 CFR 1182.2, including information demonstrating 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 the involved carriers exceeded $2 million during the 12-
month period immediately preceding the filing of the application, see 
49 CFR 1182.2(a)(5). (See Appl. 7-9; Suppl. 2-4.)
    Applicants assert that the proposed transaction is not expected to 
have an adverse impact on the adequacy of transportation services 
available to the public. (Appl. 7-9; see also Suppl. 2-4.) Applicants 
state that there are a large number of charter bus service companies 
and that barriers to entry into the passenger motor carrier business 
are low, and therefore the transaction will not result in any 
meaningful reduction in competitive charter bus services. (Appl. 7-8 
(citing All Aboard America! Holdings, Inc.--Acquis. of Control--Lux Bus 
America Co., MCF 21082 (STB served Sept. 21, 2018).) Regarding their 
contract services, Applicants claim that the contract-driven nature of 
the services involved here means that Applicants and FT will have every 
incentive to maintain and improve the adequacy of their services to the 
public. (Id. at 8.) According to Applicants, this is because contract 
renewals in this sector involve highly visible and intense negotiations 
among multiple bidders, governmental bodies, unions, political 
activists and other interested parties, and customers always have the 
option of taking such operations in-house. (Id. at 8.) Applicants claim 
that a May 2022 report by Kearney & Company shows that outsourced 
passenger transportation services contracts are highly contestable by 
firms of all sizes. (Id. at 8; see also Suppl Ex. H, Kearney Report.) 
Applicants state the report shows that the four largest companies in 
this sector (National Express, MV, Transdev/Veolia, and First Transit) 
saw a significant decline of the contracts awarded from approximately 
46 percent to 34 percent, while Transdev and First Transit's combined 
shares fell from 31 percent to 20 percent. (Appl. 8.) At the same time, 
the market share of participants other than the four leading entities 
increased from 54 percent to 67 percent. (Id.) According to Applicants, 
this shows that the market would remain subject to intense competition 
even after the proposed transaction, requiring Applicants and FT to 
maintain high service levels to compete against a wide variety of 
providers. (Id.)
    Applicants argue that, for the same reasons that the transaction 
will not have an adverse impact on the adequacy of transportation 
services available to the public, it will also not adversely affect 
competition. (Id. at 7-9; see also Suppl. 2-4.) For the charter 
services market, Applicants state that competitors could include 
virtually any regulated bus operator in the geographic area where the 
charter services are conducted. (Suppl. 7.) As to government contract 
operations, Applicants identify numerous competitors in that market. 
(See id. at 6-7.)
    Applicants state that the proposed transaction will not increase 
fixed charges payable by FT. (Appl. 9.) Applicants explain that they 
intend to pay the purchase price with a combination of cash in hand and 
a portion of a revolving credit facility that has been in place for TNA 
and affiliates since 2019; FT will not be added as a co-obligor on the 
credit facility. (Id.; see also Suppl. Ex. I, Transdev Financing/
``Fixed Charges.'') Applicants also represent that, given the 
longstanding shortage of qualified drivers and maintenance personnel, 
the transaction is highly unlikely to have adverse impacts on any 
employees or employment levels, with the possible exception of a 
handful of top management personnel. (Appl. 11; Suppl. 7.)
    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 February 22, 2023, unless opposing 
comments are filed by February 21, 2023. If any comments are filed, 
Applicant may file a reply by March 6, 2023.
    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: December 29. 2022.

    By the Board, Board Members, Fuchs, Hedlund, Oberman, Primus, 
and Schultz.
Tammy Lowery,
Clearance Clerk.
[FR Doc. 2022-28607 Filed 1-4-23; 8:45 am]
BILLING CODE 4915-01-P