[Federal Register Volume 89, Number 176 (Wednesday, September 11, 2024)]
[Notices]
[Pages 73741-73742]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-20421]


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SURFACE TRANSPORTATION BOARD

[Docket No. MCF 21121]


Student Transportation of America, Inc. et al.--Acquisition of 
Control--West Point Tours, Inc.

AGENCY: Surface Transportation Board.

ACTION: Notice tentatively approving and authorizing finance 
transaction.

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SUMMARY: On August 12, 2024, Student Transportation of America, Inc. 
(STA), a noncarrier, and its parent entities (collectively, Applicants) 
filed an application seeking authority for STA to acquire all voting 
securities of West Point Tours, Inc. (WPT), a passenger motor carrier 
that holds operating authority issued by the Federal Motor Carrier 
Safety Administration (FMCSA). 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.

DATES: Comments must be filed by October 28, 2024. If any comments are 
filed, Applicants may file a reply by November 12, 2024. If no opposing 
comments are filed by October 28, 2024, this notice shall be effective 
on October 29, 2024.

ADDRESSES: Comments, referring to Docket No. MCF 21121, may be filed 
with the Board either via e-filing on the Board's website or in writing 
addressed to: Surface Transportation Board, 395 E Street SW, 
Washington, DC 20423-0001. In addition, send one copy of comments to 
STA's representative: Mark J. Andrews, Clark Hill PLC, 1001 
Pennsylvania Ave. NW, Suite 1300 South, Washington, DC 20004.

FOR FURTHER INFORMATION CONTACT: Brian O'Boyle at (202) 245-0364. If 
you require an accommodation under the Americans with Disabilities Act, 
please call (202) 245-0245.

SUPPLEMENTARY INFORMATION: According to the application, STA is a New 
Jersey-based noncarrier that controls multiple passenger motor carriers 
that hold operating authorities issued by the FMCSA.\1\ STA is a 
subsidiary of Student Transportation of America Holdings, Inc. (STA 
Holdings), a Delaware corporation and noncarrier. STA Holdings, in 
turn, is a subsidiary of Spinner US Acquireco, Inc. (Spinner),\2\ also 
a Delaware corporation and noncarrier, which will remain under the 
majority ownership of Caisse de d[eacute]p[ocirc]t et placement du 
Qu[eacute]bec, a pension fund based in the Canadian province of Quebec. 
(Appl. 5.) Applicants state that the carriers STA controls primarily 
provide school bus transportation under contract with local school 
districts, a service that they state is covered by broad exemptions 
from FMCSA regulation. (Id. at 2.) \3\ According to Applicants, STA and 
its subsidiaries currently have approximately 23,000 employees, utilize 
an estimated 22,000 vehicles, and transport approximately 1.25 million 
students per day based on a 180-day school year. (Appl. 4.) Applicants 
state that while exempt school transportation accounts for 
approximately 97% of STA's approximately $1.3 billion in annual 
revenues, remaining revenues are generated from use of its vehicles for 
charter and special operations not involving the transportation of 
students to and from schools. (Id. at 2, 4.)
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    \1\ Additional information about the carriers controlled by STA, 
including U.S. Department of Transportation (USDOT) numbers, motor 
carrier numbers, and USDOT safety fitness ratings, can be found in 
Exhibit B of the application.
    \2\ Further information about Spinner's corporate structure and 
ownership can be found in Exhibit A of the application.
    \3\ See 49 U.S.C. 13506(a)(1) (exempting from both Department of 
Transportation and Board jurisdiction ``a motor vehicle transporting 
only school children and teachers to or from school'').
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    According to the application, WPT is a New York state-based carrier 
that holds FMCSA operating authority as well as intrastate operating 
authorities in New York state and Pennsylvania. (Id. at 3.) Like STA's 
carrier subsidiaries, WPT primarily provides school bus transportation 
under contracts with local school districts. (Id. at 2-3.) WPT 
transports approximately 9,640 students per day during the school year, 
employs approximately 200 drivers, and has a fleet of 220 vehicles, 
consisting primarily of school buses but also approximately 15 motor 
coaches. (Id. at 4.) The application states that WPT generates annual 
revenues of approximately $21 million, about 75% of which are derived 
from school-related transportation, with the remainder being derived 
from charter and special operations centered on the West Point Military 
Academy and nearby areas of the Hudson River Valley in New York state. 
(Id.) WPT's interstate motorcoach operations carry approximately 24,000 
passengers annually. (Id.)
    Pursuant to an agreement executed on July 17, 2024, STA will 
acquire all voting securities of WPT. (Id. at 2, 4.) Upon closing of 
the proposed transaction, WPT will become a direct subsidiary of STA. 
(Id. at 5.) STA and WPT expect to close the proposed acquisition in the 
fourth quarter of 2024. (Id. at 4.)
    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. Applicants have 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), 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 STA and WPT exceeded $2 million during the 
12-month period immediately preceding the filing of the application, 
see 49 CFR 1182.2(a)(5). (See Appl. 6-7.)

[[Page 73742]]

    Applicants assert that the transaction is consistent with the 
public interest. Applicants state that STA's operating subsidiaries and 
WPT have contractual obligations to provide outsourced transportation 
services and a competitive incentive to maintain and improve existing 
services because doing so enhances their chances of success when new 
outsourcing opportunities arise or when existing contracts are re-
competed. (Id.) According to Applicants, contract renewals in the 
school transportation sector often involve highly visible and intense 
negotiation processes between multiple bidders, governmental bodies, 
unions, political activists and other interested parties. (Id. at 6.) 
Thus, Applicants claim that STA will have ``strong incentives to 
maintain high service levels in order to fend off competitive bids'' 
from other bus transportation providers. (Id.) Applicants also note 
that STA's operating subsidiaries will face competition from school 
districts and local government entities that can provide bus 
transportation ``in-house.'' (Id.)
    With respect to fixed charges, Applicants state that there are no 
current plans to finance the proposed acquisition in a manner that 
would affect fixed charges payable by STA or its affiliates. (Id.) 
Applicants further note that funding for the transaction ``will be 
drawn from STA's current credit facility, and WPT (like other STA 
subsidiaries) will become a co-obligor under that facility.'' (Id.)
    Regarding the effect of the acquisition on current employees, 
Applicants state that it is highly unlikely that any employees of WPT 
would be adversely affected to any significant degree by the proposed 
transaction. (Id. at 7.) They again emphasize STA and WPT's contractual 
obligations and competitive incentives to maintain and improve existing 
services, and claim that STA and WPT ``do not have, and rationally 
could not have, any intention of significantly reducing employment 
levels involving drivers, dispatchers or vehicle maintenance 
personnel'' as a result of the acquisition. (Id.) Applicants further 
state that there is a ``longstanding shortage of qualified drivers and 
maintenance personnel,'' and assert that STA continues to actively 
recruit additional employees. (Id.)
    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 October 29, 2024, unless opposing 
comments are filed by October 28, 2024. If any comments are filed, 
Applicants may file a reply by November 12, 2024.
    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: September 5, 2024.

    By the Board, Board Members Fuchs, Hedlund, Primus, and Schultz.
Regena Smith-Bernard,
Clearance Clerk.
[FR Doc. 2024-20421 Filed 9-10-24; 8:45 am]
BILLING CODE 4915-01-P