BUSINESS

New Flyer expands presence in U.S. bus industry with NABI acquisition

06/21/2013 08:16 EDT | Updated 08/21/2013 05:12 EDT
WINNIPEG - New Flyer Industries Inc. (TSX:NFI) is expanding in the United States with the acquisition of North American Bus Industries, which has a manufacturing plant in Alabama, parts distribution centre in Ohio and a service centre in California.

The Winnipeg-based company announced Friday it will pay $80 million cash to acquire NABI from Cerberus Capital, a private equity firm that had been involved in restructuring the American bus maker and parts supplier.

"NABI represents a compelling growth platform for us," New Flyer's president and chief executive officer Paul Soubry said in a statement.

"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."

New Flyer will partially fund the deal with $65 million raised through a previously announced investment by Marcopolo SA, which will hold about one-fifth of the company's common stock. New Flyer will also draw an additional $20 million on its secured credit facility.

The transaction was expected to close later Friday.

New Flyer is a leading manufacturer of heavy-duty transit bus with some 2,200 employees in Canada and the U.S.