EQT Infrastructure, a private equity firm and infrastructure investor, has entered an agreement to acquire First Student and First Transit from FirstGroup. The $4.6-billion sale is expected to close in the second half of 2021, but is subject to FirstGroup shareholder approval, as well as North American regulatory approval.
First Student operates transportation services to approximately 1,000 school districts in North America, while First Transit operates in 300 locations and transports 350 million passengers annually.
“We are pleased to have agreed the sale of First Student and First Transit in a transaction which recognizes their full strategic value. Both are resilient, high quality businesses with strong prospects for returning to normal levels of service following the pandemic. Our colleagues at First Student and First Transit have built excellent relationships with their customers over many years, and we are proud of their commitment and expertise. I would like to pay tribute to everyone in these businesses and acknowledge the vital role they play in their communities, both now and for many years to come,” said FirstGroup CEO Matthew Gregory.
EQT Infrastructure explains it will invest in organizational, operation and digital technology enhancement “to further differentiate First Student and First Transit’s service offering.” EQT Infrastructure also notes it plans to accelerate the transition to renewable fuel sources and invest in the electrification of its fleets to “future proof” the services of First Student and First Transit.
"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 decarbonization to provide even safer and more environmentally friendly transportation services to students and communities across the continent," said Crosby Cook, partner and investment advisor with EQT Partners.
“This is a great business that has established a strong and profitable platform which positions us for sustainable growth over time. We will continue to invest in new opportunities and technologies that set us apart from our competitors,” said First Transit President Brad Thomas. “Through it all, our communities and customers will remain at the heart of everything we do.”
FirstGroup first announced a review of strategic alternatives regarding First Student and First Transit as a means to unlock shareholder value in December 2019. In March 2020, FirstGroup initiated a formal process to sell both divisions.