EQT Infrastructure to acquire First Student and First Transit
EQT is pleased to announce that EQT Infrastructure has agreed to acquire First Student and First Transit, two North American subsidiaries of the UK publicly listed company, FirstGroup plc for USD4.6 billion.
Headquartered in Cincinnati, Ohio, First Student and First Transit are market leading providers of 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. Student transportation is a critical component of the educational ecosystem, with student success metrics and funding directly correlated to attendance, and First Student has been driving positive outcomes for students since its founding in 1983.
First Transit is a leading 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 is committed to building upon the success First Student and First Transit have already had by making investments in organisational, 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.
Crosby Cook, Partner and Investment Advisor at EQT Partners, says: “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. EQT is excited to partner with the management teams of these businesses and invest in operational technology and fleet decarbonisation to provide even safer and more environmentally friendly transportation services to students and communities across the continent.”
Matthew Gregory, CEO of FirstGroup, says: “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. 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. I want to thank the employees of First Student and First Transit for their contribution to FirstGroup over the years and I look forward to following the Company’s future success.”
The transaction is subject to customary conditions and approvals and is expected to close in Summer 2021.
Morgan Stanley & Co served as lead financial advisor to EQT Infrastructure in connection with the transaction and Simpson Thacher & Bartlett LLP served as legal counsel. Barclays and BMO Capital Markets Corp. also served as financial advisors to EQT Infrastructure in connection with the transaction.
With this transaction, EQT Infrastructure V is expected to be 20-25 per cent 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.