[Federal Register Volume 90, Number 5 (Wednesday, January 8, 2025)]
[Notices]
[Pages 1589-1591]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-00200]
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SURFACE TRANSPORTATION BOARD
[Docket No. MCF 21127]
TIP Minnesota Coaches Acquisition LLC, TIP MN Investments LP, and
Tiger Infrastructure Partners Fund IV AIV LP--Acquisition of Control--
Marschall Line, Inc., Minnesota Coaches, Inc., Rehbein Transit Co.,
Inc., Ready Bus Company, Inc., Voyageur Bus Company, Inc., Minn-Dakota
Coaches, Inc., and Faribault Transportation Service, Inc.
AGENCY: Surface Transportation Board.
ACTION: Notice tentatively approving and authorizing finance
transaction.
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SUMMARY: TIP Minnesota Coaches Acquisition LLC, TIP MN Investments LP,
and Tiger Infrastructure Partners Fund IV AIV LP (Applicants) filed an
application seeking authority to acquire control of seven interstate
passenger motor carriers: Marschall Line, Inc. (Marschall Line),
Minnesota Coaches, Inc. (Minnesota Coaches), Rehbein Transit Co., Inc.
(Rehbein), Ready Bus Company Inc. (Ready Bus), Voyageur Bus Company,
Inc. (Voyageur Bus), Minn-Dakota Coaches, Inc. (Minn-Dakota), and
Faribault Transportation Service, Inc. (FTS) (collectively, the Subject
Carriers). The Board is tentatively approving and authorizing the
transaction. If no opposing comments are timely filed, this notice will
be the final Board action.
DATES: Comments must be filed by February 24, 2025. If any comments are
filed, Applicants may file a reply by March 10, 2025. If no opposing
comments are filed by February 24, 2025, this notice shall be effective
on February 25, 2025.
ADDRESSES: Comments, referring to Docket No. MCF 21127, 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
Applicants' representative: Richard G.S. Lee, Cooley LLP, 1299
Pennsylvania Avenue NW, Suite 700, 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, TIP Minnesota
Coaches Acquisition LLC (TIP Minn. Coaches) is a Delaware limited
liability company headquartered in New York, N.Y., and is not a
federally regulated motor carrier, nor does it operate or have a
controlling interest in any federally regulated motor carriers. (Appl.
2.) TIP Minn. Coaches is wholly owned by TIP MN Investments LP (TIP MN
Investments), a Delaware limited partnership headquartered in New York.
(Id.) TIP MN Investments is in turn wholly owned by Tiger
Infrastructure Partners Fund IV AIV LP, a fund and Delaware limited
partnership, headquartered in New York.\1\ (Id. at 3.) Applicants state
that neither TIP MN Investments, Tiger Infrastructure Partners Fund IV
AIV LP, Tiger Infrastructure Associates GP IV LP, nor Tiger
Infrastructure Partners LP are federally regulated motor carriers, nor
do they operate or have a controlling interest in any federally
regulated motor carriers. (Id. at 3-4.)
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\1\ Applicants state that Tiger Infrastructure Partners Fund IV
AIV LP is managed by Tiger Infrastructure Associates GP IV LP, a
noncarrier Delaware limited partnership headquartered in New York.
(Appl. 3.) More information about these entities and Tiger
Infrastructure Fund LP, which is the private equity firm that
established Tiger Investment Fund IV AIV LP, is included in the
application. (Id.)
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Applicants state that, under the proposed transaction, TIP Minn.
Coaches would acquire control of the Subject Carriers from Patrick O.
Regan (Seller) and other minority shareholders \2\ by purchasing a
majority interest in a to-be-formed Delaware limited partnership called
MNC Holdings, LP (Holdings).\3\ (Id. at 1-2.) According to Applicants,
Holdings \4\ will ultimately hold 100% ownership of several entities,
including the seven Subject Carriers, through 100% ownership of certain
intermediate limited liability companies (Intermediate Companies).\5\
(Id. at 1-2, 4, 16.) Following the closing of the proposed transaction,
Seller would continue to hold a significant stake in the Subject
Carriers as well as retain an active role in senior management and as
[[Page 1590]]
an investor in the underlying businesses. (Id. at 2.) Applicants state
that neither Holdings nor the Intermediate Companies would be passenger
motor carriers. (Id. at 4.)
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\2\ Those minority shareholders are Garrett O. Regan, Casey O.
Regan, Michael R. Clark, Michael J. Krois, Thomas J. Severson,
Michael S. Karlen, Troy J. Nelson, Angela J. Mattingly, and Michael
C. Mattingly. (Appl. 4 n.6.)
\3\ By decision served on November 14, 2024, the Board
tentatively approved and authorized an application filed by Seller
to control the Subject Carriers through a corporate reorganization
in which Seller would become the majority shareholder in MNC Holding
Company, a new entity created to serve as a holding company for the
Subject Carriers and other noncarrier entities. Patrick O. Regan--
Acquis. of Control--Faribault Transp. Serv., Inc. (Regan), MCF
21123, slip op. at 1 (STB served Nov. 14, 2024). Applicants state
that they have filed the application in this proceeding based on the
presumption that the approval and authority in Docket No. MCF 21123
would become effective and the transactions described there will be
consummated. (Appl. 2 n.3.) The Board's approval and authority in
Docket No. MCF 21123 became effective on December 31, 2024. Regan,
MCF 21123, slip op. at 1.
\4\ Applicants note that, in Docket No. MCF 21123, Holdings was
referred to as ``MNC Holding Company'' and ``Parent, LLC,'' while in
this proceeding they refer to Holdings as ``MNC Holdings, LP.''
(Appl. 5.) Applicants state that, due to discussions that have taken
place since the application in Regan was filed, there have been
minor changes to the proposed corporate structure described in
Regan. The Board finds that these differences are immaterial to the
approval and authority granted in Regan and, therefore, no
supplement or additional authority for those transactions is
required.
\5\ Specifically, Applicants state that Holdings will hold 100%
ownership of a to-be-formed Delaware limited liability company
expected to be named MNC Intermediate Holdings, LLC, which in turn
will hold 100% ownership of a to-be-formed Delaware limited
liability company expected to be named MNC Group Parent, LLC, which
in turn will hold 100% ownership of MNC Borrower, LLC, a Delaware
limited liability company, which in turn will directly or indirectly
hold 100% ownership of the Subject Carriers. (Appl. 4 n.7.) More
information about the expected corporate structure of Holdings and
its direct and indirect subsidiaries, including the seven Subject
Carriers, is included in the application. (See id., Ex. 1.)
Applicants note that the names and number of the Intermediate
Companies differ from the description provided in Regan. (Id. at 5.)
As explained above, supra note 4, the Board finds these differences
to be immaterial to its approval and authorization in Regan.
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The Applicants describe the seven Subject Carriers to be acquired
as follows: \6\
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\6\ 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., Ex. 2.) Applicants state that, prior to
closing, they expect each of these passenger motor carriers to be
converted into limited liability companies. (Id. at 1 n.1.)
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Marschall Line, whose principal place of business is in Farmington,
Minn., is a direct subsidiary of Family Bus Service Inc. (Family Bus),
a noncarrier, which will be a direct subsidiary of MNC Borrower, LLC,
and an indirect subsidiary of Holdings. (Id. at 5, 6.) Marschall Line
exclusively provides school bus transportation services, including
general and special education transportation to and from school on a
regular schedule, and school bus charter service for extracurricular
activities and special trips. (Id. at 6-7.) Applicants note that, on
limited occasions, the school bus charter service involves trips from
Minnesota into Wisconsin and other neighboring states (depending on the
location of those activities involving the school bus customers served
by Marschall Line). (Id. at 7.) Marschall Line (operating in its name
and through the assumed name Mid-County Bus Company) operates
approximately 110 power units and employs approximately 118 drivers.
(Id.)
Minnesota Coaches, whose principal place of business is in
Hastings, Minn., is also a subsidiary of Family Bus. (Id. at 6, 7.)
Minnesota Coaches operates in its name and through the assumed names
Hasting Bus Company, Big River Bus, and Big River Tours and provides
both school bus service and motorcoach service on a charter basis. (Id.
at 7.) Minnesota Coaches' school bus service includes general and
special education transportation to and from school on a regular
schedule, and school bus charter service for extracurricular activities
and special trips, which, on limited occasions, involve transportation
between Minnesota and neighboring states including Wisconsin. (Id. at
8.) Minnesota Coaches also offers motorcoach contract service for
universities, sports teams, and other business, as well as event-
specific charter services for weddings, conventions, and other events,
concentrated primarily in the Minneapolis, Minn., St. Paul, Minn., and
surrounding Twin Cities area, although it also has some interstate
operations, primarily in Wisconsin, Iowa, Illinois, and Missouri. (Id.
at 8-9.) Minnesota Coaches operates approximately 196 power units and
employs approximately 174 drivers. (Id. at 8.)
Rehbein, whose principal place of business is in Circle Pines,
Minn., is also a subsidiary of Family Bus. (Id. at 6, 9.) Rehbein
exclusively provides school bus services, which includes general and
special education transportation to and from school on a regular
schedule. (Id. at 9.) Rehbein also provides school bus charter service
for extracurricular activities and special trips, which, on limited
occasions, involves trips from Minnesota into Wisconsin or other
neighboring states (depending on the location of those activities
involving the school bus customers served by Rehbein). (Id.) Rehbein
operates approximately 97 power units and employs approximately 91
drivers. (Id. at 10.)
FTS, whose principal place of business is in Faribault, Minn., will
be a direct subsidiary of MNC Borrower, LLC, and an indirect subsidiary
to Holdings. (Id. at 5, 10.) FTS is exclusively a school bus operator,
providing student transportation service including general and special
education transportation to and from school on a regular schedule. (Id.
at 10.) FTS also provides school bus charter service for
extracurricular activities and other special trips, which on limited
occasions, involves trips from Minnesota into Wisconsin and other
neighboring states (depending on the location of those activities).
(Id.) FTS operates approximately 66 total power units and employs
approximately 88 drivers. (Id. at 11.)
Voyageur Bus, whose principal place of business is in Duluth,
Minn., is a subsidiary of Metro Bus Service, Inc., a noncarrier, which
will be a direct subsidiary to MNC Borrower, LLC, and an indirect
subsidiary to Holdings. (Id. at 6, 11.) Voyageur Bus provides school
bus transportation service that includes general and special education
transportation to and from school on a regular schedule, and school
charter service for extracurricular activities and special trips, with
some trips on occasion involving transportation between Minnesota and
neighboring states including Wisconsin. (Id. at 11.) Voyageur Bus also
offers motorcoach contract services for universities, sports teams, and
other business, as well as event-specific charter services for
weddings, conventions and other events in the greater Duluth area. (Id.
at 11-12.) Voyageur Bus's motorcoach services are conducted primarily
in Minnesota, with some operations in Wisconsin, Iowa, Illinois, or
other states across the U.S. based on customer demand for special event
service. (Id. at 12.) Applicants state that Voyageur operates
approximately 118 power units and employs approximately 125 drivers.
(Id.) Applicants further note that Voyageur also operates a fleet of
motorcoaches owned by Lake Superior Motorcoaches, Inc., a noncarrier
subsidiary of Metro Bus Service, Inc., through a revenue-sharing
arrangement. (Id. at 11 n.14.)
Minn-Dakota, whose principal place of business is in Fergus Falls,
Minn., is a direct subsidiary of Ottertail Coaches, Inc., a noncarrier
direct subsidiary of Ottertail Transportation, Inc., which will be a
direct subsidiary of MNC Borrower, LLC, and an indirect subsidiary of
Holdings. (Id. at 6, 12-13.) Minn-Dakota provides school bus
transportation service that includes general and special education
transportation to and from school on a regular schedule, and school
charter service for extracurricular activities and special trips. (Id.
at 13.) Applicants note that some of these trips involve transportation
between Minnesota and neighboring states including North Dakota. (Id.)
Applicants state that Minn-Dakota also offers motorcoach contract
service for universities, sports teams, and other business, as well as
event-specific charter services for weddings, conventions, and other
events in the Fergus Falls area. (Id.) Applicants state that some of
Minn-Dakota's motorcoach services are conducted out of state, mostly
within North Dakota and South Dakota, but a limited amount of activity
also occurs in Iowa and Wisconsin, and the remainder is spread out
nationally based on customer demand for special event service. (Id. at
13-14.) Applicants state that Minn-Dakota operates approximately 14
power units and employs approximately 34 drivers. (Id. at 13.)
Ready Bus, whose primary place of business is in Rochester, Minn.,
will be a direct subsidiary of MNC Borrower, LLC, and an indirect
subsidiary to Holdings. (Id. at 6.) Ready Bus provides school
transportation service that includes general and special education
transportation to and from school on a regular schedule, and school
charter service for extracurricular activities and special trips. (Id.
at 14.) Applicants note that, on limited occasions, some of these trips
involve transportation between Minnesota and neighboring states
including Wisconsin, depending on the location of the customer
activity. (Id.) Ready Bus also offers motorcoach
[[Page 1591]]
contract service for universities, sports teams, and other business, as
well as event-specific charter services for weddings, conventions and
other events with service in Minnesota, Wisconsin, and neighboring
states. (Id.) According to the application, approximately 70% of Ready
Bus's motorcoach service is conducted within Minnesota or Wisconsin;
most of the remaining service is regionally concentrated in Iowa,
Illinois, Missouri, and Indiana, and the rest is spread out nationally
based on customer demand for special event service. (Id. at 15.)
Applicants state that Ready Bus operates approximately 59 power units
and employs approximately 56 drivers. (Id.)
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 the
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). (Appl. 16.)
Applicants state that their proposed acquisition of control of the
Subject Carriers will be consistent with the public interest. (Id. at
17.) Applicants assert that the adequacy of the transportation
currently provided by the Subject Carriers will remain intact, as they
have no plans to change the nature of the transportation services
currently provided by the Subject Carriers or to terminate any of the
student or transit transportation contracts currently in place. (Id. at
18.) Applicants also assert that neither they nor Tiger Infrastructure
Fund LP (including any funds it manages) directly or indirectly control
any other federally regulated motor passenger carriers operating in the
United States and therefore own no businesses that would compete with
the Subject Carriers. (Id. at 17.) Applicants further state that the
Subject Carriers face significant competition to the school bus
services and motorcoach services that they provide in the geographic
areas in which they operate. (Id.) According to Applicants, they also
plan to expand and modernize the fleet in order to provide reliable
service to its current and future customers. (Id. at 18.) Applicants
also state that they plan to retain the current management of each of
the Subject Carriers, including their experienced safety managers at
the corporate and local levels, and that the Seller will also retain a
position in senior management and board representation, providing
Applicants access to Seller's years of knowledge and experience with
respect to the Subject Carriers and the industry more broadly. (Id.)
With respect to fixed charges, Applicants state that they are
financing the cost of the proposed transaction with a combination of
debt and equity capital. (Id. at 19.) According to Applicants, they do
not expect that these fixed charges will impact the Subject Carriers'
ability to provide transportation services to the public because the
debt used to finance the transaction is a secured credit facility based
on customary terms appropriate for the asset value of Holdings; each of
the Subject Carriers has a stable revenue stream from contracts with
school districts, universities, and other institutional entities, which
should be more than adequate to service existing and anticipated future
debt; and the proposed transaction will enable the Subject Carriers to
maintain future financial stability through access to considerable
funds from Tiger Infrastructure Partners LP and its affiliates. (Id.)
Applicants state that they do not expect the proposed transaction
to adversely affect the interest of Subject Carrier employees, as they
currently have no plans for employee layoffs or other staffing
reductions, nor do they plan to adversely change any existing employee
benefits. (Id.)
Based on Applicants' representations, the Board finds that the
acquisition of control of the Subject Carriers 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
the expiration of the comment period, this notice will take effect
automatically and will be the final Board action in this proceeding.
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 acquisition of control of the Subject Carriers 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 25, 2025, unless opposing
comments are filed by February 24, 2025. If any comments are filed,
Applicants may file a reply by March 10, 2025.
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: January 2, 2025.
By the Board, Board Members Fuchs, Hedlund, Primus, and Schultz.
Jeffrey Herzig,
Clearance Clerk.
[FR Doc. 2025-00200 Filed 1-7-25; 8:45 am]
BILLING CODE 4915-01-P