New Flyer Industries Inc. announced on June 21 the acquisition of North American Bus Industries, Inc. (NABI) from an affiliate of Cerberus Capital Management, L.P. for cash consideration of approximately $80 million, virtually all for the satisfaction of affiliate debt.
The acquisition excludes discontinued operations in Hungary and substantially all related assets and liabilities. NABI was founded in 1992, and was known prior to October 1996 as American Ikarus. The completion of the acquisition and related financing transactions is subject only to confirmation of the required wire transfers of funds which is expected later today.
With bus manufacturing operations in Anniston, Ala., a parts distribution center in Delaware, Ohio, and a service center in Jurupa Valley, Calif., NABI is an innovative manufacturer of urban transit buses for U.S. customers. NABI also operates one of the transit industry’s most sophisticated aftermarket parts organizations, sourcing parts from over 200 different suppliers and providing support for transit buses throughout North America. For the last twelve months ended March 31, NABI delivered 582 bus equivalent units (“EUs”) with bus revenue of approximately $268 million, aftermarket parts revenue of approximately $60 million, and a combined Adjusted EBITDA of approximately $20 million. NABI currently has a total backlog of 1,579 EUs of which 593 are firm and 986 are options.
New Flyer’s Chairman of the Board, the Honourable Brian Tobin, P.C. O.C. commented, “The acquisition of NABI marks an important milestone for New Flyer and is consistent with the company’s strategic plan to ensure market and technology leadership, while providing public transit operators with long-term stability and excellence in product support. We have been able to proceed with this transaction while maintaining a flexible and conservative approach to our balance sheet.”
New Flyer’s President and CEO Paul Soubry explained further, “NABI represents a compelling growth platform for us. The addition of NABI to the New Flyer family provides New Flyer with a highly complementary product line, access to new customers, a cost efficient manufacturing platform based in Alabama, and it creates a significant player in aftermarket parts. The Company plans to operate the NABI bus and NABI parts operations under the names NABI Bus, LLC and NABI Parts, LLC, respectively, within the New Flyer group of companies.”
Jim Marcotuli, NABI’s president and CEO, added “New Flyer is a world-class company and this acquisition will provide NABI with synergistic opportunities to achieve an even higher level of performance and success. The combined entity will be positioned to provide customers with an enhanced product offering and superior customer service.”
“This transaction is mutually beneficial for both New Flyer’s and NABI’s customers and will provide both companies with access to new resources and customers that will serve as catalysts for future growth,” said Dev Kapadia, a Cerberus managing director. “We are proud of the operational turnaround that occurred since we acquired NABI in 2006 under the leadership of President and CEO Jim Marcotuli, and with capital resources and extensive operating expertise from Cerberus.”
The transaction presents a number of attractive opportunities for New Flyer, including: