On Friday, Swedish private equity and real assets giant EQT, which manages EUR 67 billion (around $81 billion) of global client assets across 26 different funds, announced that its infrastructure subsidiary (EQT Infrastructure) is buying North American yellow school bus operator First Student and public transportation provider First Transit from the U.K.’s FirstGroup PLC. The price is $4.6 billion.
Headquartered in Cincinnati, Ohio, both First Student and First Transit provide essential transportation services to schools and communities in North America.
First Student is the largest student transportation service provider in North America, providing over 900 million student journeys a year to approximately 1,000 school districts. EQT noted in an official announcement on Friday that student transportation is a critical component of the educational ecosystem, with student success metrics and funding directly correlated to attendance, and that First Student has been driving positive outcomes for students since its founding in 1983.
First Transit is a public transit management operator that transports 350 million passengers annually across approximately 300 locations in North America. Founded in 1955, First Transit provides essential mobility services to communities, college campuses, businesses, and elderly care facilities that are economical, safe, and environmentally friendly.
EQT Infrastructure says it is committed to building upon the existing successes of First Student and First Transit by investing in “organizational, operational and digital technology initiatives to further improve and differentiate the Company’s service offering.” Additionally, EQT Infrastructure intends to help future-proof the Company by investing in the electrification of its fleet and accelerating its transition to renewable fuel sources in order to support passenger health and reduce environmental impact.
“First Student and First Transit play critical roles in North America’s transportation infrastructure; both businesses are market leaders, offering best-in-class safety, reliability, and service,” said EQT Partners Investment Adviser and Partner Crosby Cook, commenting on the transaction. “EQT is excited to partner with the management teams of these businesses and invest in operational technology and fleet decarbonization to provide even safer and more environmentally friendly transportation services to students and communities across the continent.”
“EQT has a strong record of success in the Transport & Logistics sector, and we have been impressed by EQT’s vision for investment and growth at First Student and First Transit,” FirstGroup CEO Matthew Gregory said. “I am confident that EQT will be a great partner for the Company to achieve its full potential as it embarks on its next phase of growth.”
Following this transaction, EQT Infrastructure V is expected to be 20-25 percent invested (including closed and/or signed investments, announced public offers, if applicable, and less any expected syndication) based on its target fund size, and subject to customary regulatory approvals.
The deal is expected to close in summer 2021.
