Notice2022-28607
Transdev Group, S.A.-Acquisition of Control-First Transit Topco, Inc.
Primary source
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Published
January 5, 2023
Issuing agencies
Surface Transportation Board
Abstract
Transdev Group, S.A. (Transdev), a noncarrier, its noncarrier subsidiary Transdev North America, Inc. (TNA), and TNA's carrier subsidiary Transdev Services, Inc. (TSI) (collectively, Applicants) have filed an application for TNA to acquire all voting securities of noncarrier First Transit Topco Inc. (Topco), and thereby acquire control of a Topco subsidiary, First Transit, Inc. (FT), an interstate passenger motor carrier, from Recess Holdco LLC, a noncarrier affiliate of FT. The Board is tentatively approving and authorizing this transaction. If no opposing comments are timely filed, this notice will be the final Board action.
Full Text
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<title>Federal Register, Volume 88 Issue 3 (Thursday, January 5, 2023)</title>
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[Federal Register Volume 88, Number 3 (Thursday, January 5, 2023)]
[Notices]
[Pages 898-899]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-28607]
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SURFACE TRANSPORTATION BOARD
[Docket No. MCF 21103]
Transdev Group, S.A.--Acquisition of Control--First Transit
Topco, Inc.
AGENCY: Surface Transportation Board.
ACTION: Notice tentatively approving and authorizing finance
transaction.
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SUMMARY: Transdev Group, S.A. (Transdev), a noncarrier, its noncarrier
subsidiary Transdev North America, Inc. (TNA), and TNA's carrier
subsidiary Transdev Services, Inc. (TSI) (collectively, Applicants)
have filed an application for TNA to acquire all voting securities of
noncarrier First Transit Topco Inc. (Topco), and thereby acquire
control of a Topco subsidiary, First Transit, Inc. (FT), an interstate
passenger motor carrier, from Recess Holdco LLC, a noncarrier affiliate
of FT. The Board is tentatively approving and authorizing this
transaction. If no opposing comments are timely filed, this notice will
be the final Board action.
DATES: Comments must be filed by February 21, 2023. If any comments are
filed, Applicants may file a reply by March 6, 2023. If no opposing
comments are filed by February 21, 2023, this decision will be final on
February 22, 2023.
ADDRESSES: Comments may be filed with the Board either via e-filing on
the Board's website or mailing to the Board's offices. Comments may be
e-filed at <a href="http://www.stb.gov/proceedings-actions/e-filing/other-filings/">www.stb.gov/proceedings-actions/e-filing/other-filings/</a> and
must reference Docket No. MCF 21103. Mailed comments may be sent to:
Surface Transportation Board, 395 E Street SW, Washington, DC 20423-
0001. In addition, one copy of comments must be sent to Applicants'
representative: Mark J. Andrews, Clark Hill PLC, 1001 Pennsylvania
Avenue NW, Suite 1300 South, Washington, DC 20004.
FOR FURTHER INFORMATION CONTACT: Jonathon Binet at (202) 245-0368.
Assistance for the hearing impaired is available through the Federal
Relay Service at (800) 877-8339.
SUPPLEMENTARY INFORMATION: According to the application,\1\ Transdev is
under the majority ownership of Caisse des depots et consignations, a
French public-sector financial institution, and the minority ownership
of Rethmann Group, a family-owned German company.\2\ (Appl. 6.)
Transdev does not have interstate carrier authority. (See id. at 2
(stating that Transdev is a noncarrier).) Transdev controls TNA,\3\ a
noncarrier that controls interstate motor carrier TSI and its two
interstate motor carrier subsidiaries, Pittsburgh Transportation Group
Charter Services and SFO Airporter, Inc.\4\ (Id. at 2, 4; Suppl. 4.)
Applicants state that Transdev is generally engaged in providing
contract-based passenger transportation services to transit
authorities, other governmental agencies, corporations, educational
institutions, and healthcare facilities wishing to outsource such
transportation services. (Appl. 6; see also Suppl. Ex. C (identifying
Transdev Clients, Locations, Equipment, and Employees.) According to
Applicants, TSI and its carrier affiliates perform a very small amount
of charter work, representing less than .0054% of Transdev's total U.S.
business, in San Marcos, Tex., San Jose, Cal., and Pittsburgh, Pa.
(Suppl. 4-5.)
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\1\ The application initially was filed on November 10, 2022. On
December 6, 2022, Applicants filed a supplement to the application.
Therefore, for purposes of determining the procedural schedule and
statutory deadlines, the filing date of the application is December
6, 2022. See 49 CFR 1182.4(a).
\2\ More information about Transdev's corporate structure and
ownership can be found in the application and the supplement. (See
Appl. 6; Suppl. Ex. A.)
\3\ TNA was formerly known as Veolia Transportation.
\4\ Further information about these motor carriers, including
U.S. Department of Transportation (USDOT) numbers, motor carrier
numbers, and USDOT safety fitness ratings, can be found in the
application. (See Appl. 4.)
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The application explains that under this transaction, all voting
securities of Topco would be acquired by TNA, and Topco would become a
direct subsidiary of TNA and an indirect subsidiary of Transdev. (Appl.
2, 6.) Topco, a noncarrier, is an intermediate parent company of FT,\5\
a passenger motor carrier that controls various noncarrier
subsidiaries.<SUP>6 7</SUP> (Id. at 2.) According to the application,
FT and certain noncarrier FT affiliates (collectively, the FT entities)
transport 300 million passengers annually to and from approximately 300
locations across North America, utilizing approximately 12,000
vehicles. (Id. at 5; see also Suppl. Ex. E, First Transit Customer
Location and Fleet Report; id., Ex. G, First Transit Employee Locations
by State.) FT provides essential mobility services including fixed
route bus services, paratransit, shuttle bus services, and
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vehicle maintenance services. (Appl. 4.) Applicants state that FT's
contract customers include state and local transit agencies, as well as
other governmental agencies, airports, and private institutions. (Id.;
see also Suppl. Ex. E.) The application explains that FT holds
operating authority from FMCSA because it occasionally conducts
regulated interstate charter operations when its vehicles and drivers
are not engaged in its primary business of contract transit services.
(Appl. 4.) According to the application, FT also engages in regulated
intrastate transportation in California, Rhode Island, and the
Washington, DC metropolitan area. (Id. at 4-5.) TNA's acquisition of
Topco's voting securities would make FT a direct subsidiary of TNA and
an indirect subsidiary of Transdev. (Id. at 6.)
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\5\ Transdev also would acquire control of various noncarrier
subsidiaries of FT. With respect to the acquisition of the non-
regulated FT subsidiaries, the appropriate filing was made under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, 15 U.S.C. 18a
(HSR). (Appl. 3 n.2.) On December 12, 2022, Applicants filed a
letter stating that the HSR 30-day period has expired without any
action being taken and, accordingly, the HSR process has concluded.
\6\ The indirect beneficial owners of FT are EQT Infrastructure
V Collect EUR SCSp and EQT Infrastructure V Collect USD SCSp
(collectively, EQT). EQT's control of FT was approved by the Board
in EQT Infrastructure V Collect EUR SCSp--Acquisition of Control--
First Student, Inc., MCF 21093 (STB served May 21, 2021).
\7\ More information about Topco's corporate structure and
ownership can be found in the application and the supplement. (See
Appl. 2-3; Suppl. Ex. B.)
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Under 49 U.S.C. 14303(b), the Board must approve and authorize a
transaction that it finds consistent with the public interest, taking
into consideration at least (1) the effect of the proposed transaction
on the adequacy of transportation to the public, (2) the total fixed
charges resulting from the proposed transaction, and (3) the interest
of affected carrier employees. Applicants have submitted information
required by 49 CFR 1182.2, including information demonstrating that the
proposed transaction is consistent with the public interest under 49
U.S.C. 14303(b), see 49 CFR 1182.2(a)(7), and a jurisdictional
statement under 49 U.S.C. 14303(g) that the aggregate gross operating
revenues of the involved carriers exceeded $2 million during the 12-
month period immediately preceding the filing of the application, see
49 CFR 1182.2(a)(5). (See Appl. 7-9; Suppl. 2-4.)
Applicants assert that the proposed transaction is not expected to
have an adverse impact on the adequacy of transportation services
available to the public. (Appl. 7-9; see also Suppl. 2-4.) Applicants
state that there are a large number of charter bus service companies
and that barriers to entry into the passenger motor carrier business
are low, and therefore the transaction will not result in any
meaningful reduction in competitive charter bus services. (Appl. 7-8
(citing All Aboard America! Holdings, Inc.--Acquis. of Control--Lux Bus
America Co., MCF 21082 (STB served Sept. 21, 2018).) Regarding their
contract services, Applicants claim that the contract-driven nature of
the services involved here means that Applicants and FT will have every
incentive to maintain and improve the adequacy of their services to the
public. (Id. at 8.) According to Applicants, this is because contract
renewals in this sector involve highly visible and intense negotiations
among multiple bidders, governmental bodies, unions, political
activists and other interested parties, and customers always have the
option of taking such operations in-house. (Id. at 8.) Applicants claim
that a May 2022 report by Kearney & Company shows that outsourced
passenger transportation services contracts are highly contestable by
firms of all sizes. (Id. at 8; see also Suppl Ex. H, Kearney Report.)
Applicants state the report shows that the four largest companies in
this sector (National Express, MV, Transdev/Veolia, and First Transit)
saw a significant decline of the contracts awarded from approximately
46 percent to 34 percent, while Transdev and First Transit's combined
shares fell from 31 percent to 20 percent. (Appl. 8.) At the same time,
the market share of participants other than the four leading entities
increased from 54 percent to 67 percent. (Id.) According to Applicants,
this shows that the market would remain subject to intense competition
even after the proposed transaction, requiring Applicants and FT to
maintain high service levels to compete against a wide variety of
providers. (Id.)
Applicants argue that, for the same reasons that the transaction
will not have an adverse impact on the adequacy of transportation
services available to the public, it will also not adversely affect
competition. (Id. at 7-9; see also Suppl. 2-4.) For the charter
services market, Applicants state that competitors could include
virtually any regulated bus operator in the geographic area where the
charter services are conducted. (Suppl. 7.) As to government contract
operations, Applicants identify numerous competitors in that market.
(See id. at 6-7.)
Applicants state that the proposed transaction will not increase
fixed charges payable by FT. (Appl. 9.) Applicants explain that they
intend to pay the purchase price with a combination of cash in hand and
a portion of a revolving credit facility that has been in place for TNA
and affiliates since 2019; FT will not be added as a co-obligor on the
credit facility. (Id.; see also Suppl. Ex. I, Transdev Financing/
``Fixed Charges.'') Applicants also represent that, given the
longstanding shortage of qualified drivers and maintenance personnel,
the transaction is highly unlikely to have adverse impacts on any
employees or employment levels, with the possible exception of a
handful of top management personnel. (Appl. 11; Suppl. 7.)
Based on Applicants' representations, the Board finds that the
acquisition as proposed in the application is consistent with the
public interest and should be tentatively approved and authorized. If
any opposing comments are timely filed, these findings will be deemed
vacated, and, unless a final decision can be made on the record as
developed, a procedural schedule will be adopted to reconsider the
application. See 49 CFR 1182.6. If no opposing comments are filed by
expiration of the comment period, this notice will take effect
automatically and will be the final Board action.
This action is categorically excluded from environmental review
under 49 CFR 1105.6(c).
Board decisions and notices are available at <a href="http://www.stb.gov">www.stb.gov</a>.
It is ordered:
1. The proposed transaction is approved and authorized, subject to
the filing of opposing comments.
2. If opposing comments are timely filed, the findings made in this
notice will be deemed vacated.
3. This notice will be effective February 22, 2023, unless opposing
comments are filed by February 21, 2023. If any comments are filed,
Applicant may file a reply by March 6, 2023.
4. A copy of this notice will be served on: (1) the U.S. Department
of Transportation, Federal Motor Carrier Safety Administration, 1200
New Jersey Avenue SE, Washington, DC 20590; (2) the U.S. Department of
Justice, Antitrust Division, 10th Street & Pennsylvania Avenue NW,
Washington, DC 20530; and (3) the U.S. Department of Transportation,
Office of the General Counsel, 1200 New Jersey Avenue SE, Washington,
DC 20590.
Decided: December 29. 2022.
By the Board, Board Members, Fuchs, Hedlund, Oberman, Primus,
and Schultz.
Tammy Lowery,
Clearance Clerk.
[FR Doc. 2022-28607 Filed 1-4-23; 8:45 am]
BILLING CODE 4915-01-P
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</html>Indexed from Federal Register on January 5, 2023.
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