NEW YORK, Nov. 10, 2015 /PRNewswire/ -- KPS Capital Partners, LP ("KPS") announced today that it signed a definitive agreement, through an affiliate, to sell its portfolio company Motor Coach Industries International, Inc. ("MCI" or the "Company") to New Flyer Industries Inc. ("New Flyer", TSX: NFI) for consideration of approximately $480 million.
MCI is the leading manufacturer of intercity coaches in the U.S. and Canada. The Company builds expertly engineered, best-selling models for the tour, charter, line-haul, commuter and transit markets. MCI also offers 24-hour technical support, industry-leading technician training and the most extensive aftermarket parts and repair service. Headquartered in Des Plaines, Illinois, MCI operates manufacturing facilities in Winnipeg, Manitoba and Pembina, North Dakota, a master parts distribution center in Louisville, KY and six service centers in North America. The Company employs over 1,500 associates across North America.
KPS acquired MCI through a highly complex out-of-court restructuring and change of control transaction in 2010. Under KPS' ownership, MCI successfully achieved a highly ambitious turnaround that re-established the Company as a clear market leader in the North American motor coach industry. Key elements of MCI's transformation included retaining a new management team, creating a new organizational structure and corporate culture, materially improving its operating cash cost structure, labor productivity and plant efficiency, restructuring underperforming business units, and implementing a new strategic approach to customers, product mix and the market.
In 2012, MCI established a strategic partnership with Daimler AG and acquired exclusive distribution rights for Setra motor coaches and aftermarket parts in the United States and Canada. The strategic partnership with Daimler AG further strengthened MCI's leadership position in North America by adding the luxury Setra motor coach to MCI's product portfolio, and enabled collaboration regarding engineering, manufacturing capabilities and advanced technologies.
Jay Bernstein, a Partner of KPS, said, "We are very proud of MCI's incredible turnaround, executed at the low point of the North America motor coach industry cycle and at the height of the financial crisis. The success of our investment in MCI demonstrates KPS' ability to see value where others do not, to buy right and to make businesses better. In 2010, we acquired a failing, deeply under-managed business and transformed it into a thriving, highly profitable, and growing business. KPS worked with management to improve every aspect of MCI, resulting in best-in-class profitability, quality and manufacturing efficiency across the entire specialty vehicle industry. We take immense pride in what MCI has accomplished.
"We thank Daimler AG for their valuable contributions to MCI's success. The strategic partnership with Daimler AG further strengthened MCI's leadership position in North America and helped accelerate the company's growth trajectory. Additionally, we thank Hartmut Schick, Head of Daimler Buses Worldwide, for his leadership as a member of MCI's Board of Directors.
"We thank and congratulate Richard Heller, MCI's Chief Executive Officer, his management team and all the dedicated employees of MCI, many of whom are represented by the International Association of Machinists and Aerospace Workers, for their vision, passion and flawless execution in an extremely ambitious undertaking. The material value created for our investors since 2010 is the result of their collective effort, for which we are very grateful. The sale of MCI to New Flyer, a leading manufacturer of heavy duty transit buses, is a great outcome for our investors, MCI, its management, employees and customers. We are confident that MCI will continue to grow and prosper in the future as part of New Flyer," Mr. Bernstein concluded.
Richard Heller, Chief Executive Officer of MCI, added, "Working in partnership with KPS, we executed a remarkable turnaround that formed the foundation for MCI's significant growth. We are grateful to KPS for providing our team with leadership, expertise, capital and other resources as we executed the turnaround. MCI is thrilled to join New Flyer, which has the resources, expertise and access to capital that will enable MCI to achieve an even higher level of success. We thank our customers, suppliers and employees for their contributions to our remarkable success."
Completion of the transaction, which is expected during the fourth quarter, is subject to customary closing conditions.
Paul, Weiss, Rifkind, Wharton & Garrison LLP and Goodmans LLP are serving as legal counsel to KPS and MCI with respect to the transaction.
J.P. Morgan is acting as exclusive financial advisor to MCI with respect to the transaction.
About Motor Coach Industries International, Inc.
MCI is the leading manufacturer of intercity coaches in the U.S. and Canada. The Company builds expertly engineered, best-selling models for the tour, charter, line-haul, commuter and transit markets. MCI also offers 24-hour technical support, industry-leading technician training and the most extensive aftermarket parts and repair service. Headquartered in Des Plaines, Illinois, MCI operates manufacturing facilities in Winnipeg, Manitoba and Pembina, North Dakota, a master parts distribution center in Louisville, KY and six service centers in North America. The Company employs over 1,500 associates across North America. For more information, visit www.mcicoach.com.
About KPS Capital Partners, LP
KPS is the manager of the KPS Special Situations Funds, a family of investment funds with approximately $5.6 billion of assets under management. KPS seeks to realize significant capital appreciation by making controlling equity investments in companies across a diverse range of manufacturing industries experiencing a period of transition or challenged by the need to effect immediate and significant change. KPS creates value for its investors by seeing value where others do not, buying right and making businesses better. The KPS investment strategy is based primarily upon partnering with world-class management teams to effect material and sustainable improvements in the operations of its businesses. Thereafter, KPS focuses on growing its businesses, both organically and through strategic acquisitions. KPS portfolio companies have aggregate annual revenues of approximately $5.8 billion, operate 96 manufacturing facilities in 23 countries, and employ approximately 42,000 associates, directly and through joint ventures worldwide. The KPS investment strategy and portfolio companies are described in detail at www.kpsfund.com.
About Daimler AG
Daimler AG (the "Daimler Group") is one of the world's most successful automotive companies. With its divisions Mercedes-Benz Cars, Daimler Trucks, Mercedes-Benz Vans, Daimler Buses and Daimler Financial Services, the Daimler Group is one of the biggest producers of premium cars and the world's biggest manufacturer of commercial vehicles with a global reach. Daimler sells its vehicles and services in nearly all the countries of the world and has production facilities on five continents. Its current brand portfolio includes, in addition to the world's most valuable premium automotive brand, Mercedes-Benz, the brands smart, Freightliner, Western Star, BharatBenz, Fuso, Setra, Thomas Built Buses, moovel and car2go. The company is listed on the stock exchanges of Frankfurt and Stuttgart (stock exchange symbol DAI). In 2014, the Daimler Group sold 2.5 million vehicles and employed a workforce of 279,972 people; revenue totaled €129.9 billion and EBIT amounted to €10.8 billion. Further information from Daimler is available at: www.media.daimler.com and www.daimler.com.
About New Flyer Industries Inc.
New Flyer is the leading manufacturer of heavy-duty transit buses in the United States and Canada. New Flyer is the industry technology leader and offers the broadest product line of transit buses including drive systems powered by: clean diesel, natural gas, diesel-electric hybrid, electric trolley and now, battery-electric. All buses are supported by an industry-leading comprehensive warranty and support program, and service network. New Flyer also operates the industry's most sophisticated aftermarket parts organization, sourcing parts from hundreds of different suppliers and providing support for all types of transit buses. The New Flyer group of companies employ over 3,300 team members with manufacturing, fabrication, parts distribution and service centers in both Canada and the United States. Over 32,000 New Flyer and NABI heavy-duty transit buses are in operation today. Further information is available on New Flyer's website at www.newflyer.com.
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SOURCE KPS Capital Partners, LP