Shares of Blue Bird Corporation will soon be available for public trading after Hennessy Capital Acquisition (HCAC) signed an agreement to obtain all the outstanding capital stock of School Bus Holdings, Inc., an indirect parent company of the school bus manufacturer.
HCAC inked the $490-million deal with Traxis Group B.V, which is majority owned by Cerberus Capital Management, L.P. The terms of the purchase agreement specify that the aggregate equity purchase price at the close of the deal will be $255 million made up of cash and HCAC shares of common stock, plus $235 million of Blue Bird’s existing debt. Cerberus also remains a major stockholder.
Blue Bird president and CEO Phil Horlock said he is “very excited” as he will continue to lead the company under the new arrangement.
“We believe this transaction will enable us to maintain our growth momentum with our exceptional workforce building the world’s finest school bus,” Horlock added in the statement.
Daniel J. Hennessy, chairman and CEO of HCAC also shared Horlock’s sentiments.
“We are acquiring an iconic American brand with an 87-year history of innovation,” he said. “We believe Blue Bird fits squarely into our stated investment criteria, and that as a public company, Blue Bird will have the capital structure, ownership support, operating flexibility and enhanced public image to achieve its maximum potential.”
Chan Galbato, CEO of Cerberus Operations and Advisory Company, LLC, and non-executive chairman of Blue Bird, noted: “Blue Bird is a terrific, well-run company with great people and products and we are thrilled to continue our longstanding relationship with them, as Cerberus will retain a significant ownership interest in the company.”
Once the deal closes, Traxis is anticipated to be the principal stockholder of the combined company, owning approximately 42.4 percent of HCAC’s outstanding common stock. HCAC’s existing stockholders will retain an ownership interest of about 57.6 percent.
Also happening at the close of the deal is the exchange of 12,125,000 of the 23,625,000 currently outstanding HCAC warrants for a total of 1,212,500 shares of HCAC common stock. This will be achieved through a combination of a negotiated exchange with HCAC’s sponsor and an offer by HCAC to exchange up to 50 percent of its outstanding warrants issued to public stockholders in the IPO for shares of its common stock.
The new board of directors will be made up of six members of Blue Bird’s existing board, including: Horlock; Galbato; Dev Kapadia, who is a Ceberus managing director; and two members of HCAC’s board including Hennessy and a newly designated individual.
