New Flyer announces acquisition of MCI

New Flyer Industries Inc. has announced that it has entered into a definitive agreement to acquire Motor Coach Industries International, Inc. from an affiliate of KPS Capital Partners, L.P. for cash consideration of US$455 million subject to certain purchase price adjustments.

0 November 10, 2015

The completion of the transaction is subject to customary closing conditions including U.S. antitrust and Canadian Competition Act approvals. Management currently expects the Transaction to close by the end of 2015.

Founded in 1933 in Winnipeg, MCI is North America’s leading motor coach manufacturer and parts and service supplier with 3 manufacturing facilities and 9 service and parts distribution centers.

As of December 31, 2014, MCI had the largest installed base of motor coaches in North America with approximately 28,000 units, nearly twice the installed base of its nearest competitor. Well known in the industry for best-in-class quality, reliability, lowest cost of ownership and a robust coach aftermarket parts and services offering, MCI’s business parallels New Flyer’s leading position in the North American heavy-duty transit bus industry. While there are a few common public customers, MCI does not compete with New Flyer.

For the nine months ended September 30, 2015 MCI delivered 576 new coaches resulting in new coach revenue of approximately US$315 million and also generated pre-owned coach and aftermarket parts and service combined revenue of approximately US$128 million. Total revenue for this period was approximately US$443 million.

Paul Soubry, New Flyer’s President and Chief Executive Officer commented on the acquisition, “We are thrilled to combine North America’s #1 brand in heavy duty-transit buses with North America’s #1 brand in motor coaches. We are very proud of our track record that focuses on employee engagement, customer satisfaction and shareholder value. We intend to build on this success with the addition of MCI and view this complementary business as an important step forward to diversification and growth in areas where we can leverage our OpEx, sourcing, manufacturing, parts distribution and service expertise.”

New Flyer’s Chairman of the Board, the Honourable Brian Tobin P.C., O.C., added, “With the successful acquisition and integration of Orion Parts and NABI, New Flyer has demonstrated that we have the leadership, expertise, financial performance and capital structure to complete accretive acquisitions and create real shareholder value”.

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