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New Flyer Industries acquires NABI for $80 Million


Cait Sith

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Here's how I see it playing out:

 

Customers who want a small, medium-duty bus - MidiBus

Customers who want a basic, lower-cost transit bus - LFW

Customers who want a premium transit bus for true heavy-duty use - Xcelsior

Customers who want a Bus Rapid Transit product - Xcelsior or BRT

 

The Anniston plant is likely a key part of the acquisition.  NABI has spent quite a bit of money on the plant in recent years, and I believe the Anniston plant is non-union.  I could actually see New Flyer potentially closing one or both of its Minnesota plants and moving work down to Alabama.  I think the workers there will be fine.

 

 

It is way to early to assume or play arm chair quarterback, at this point New Flyer might not even know.

 

With that said I don't think any plants will close, the reason being bot companies currently have a backlog on orders so how would closing any plants make sense?   It's just the classic "one company bought another and will part the obtained company."  Who knows that may happen, but not anytime soon and it doesn't make any sense to close a plant right off the (or anytime soon) while both companies have backlogs.  

 

IF they closed the Anniston plant they'd have to move all the work for NABI orders to New Flyer.  Could they handle all of the extra work?  No.  They would just add to the back log and piss off customers, customers who didn't choose New Flyer in the first place who now have to wait longer.

 

 

Doesn't say it in the press release, but it could definitely happen. Or we could see NFI products being produced in Anniston, who knows. It might be a good idea for them to use the new steel frame production in Anniston for American orders instead of the Canadian plants used now.

 

That's a good thought, bragging that certain buses are 100% produced in the USA could draw a big market.  

 

 

With all the backlogs I could see New Flyer needing a new plant.  Hmm, there's an empty facility and a skilled workforce with bus building experience in Oriskany, NY.  Just send the new workers to learn for a few weeks in Crookston, MN, St, Cloud, MN, or Anniston, AL.  

 

I was reading how the new CEO of Ford implemented a plan where he eliminated factories having specialized production, where one plant only produced one vehicle and had factories producing multiple lines.  I would implement a similar plan for New Flyer & NABI, make all the factories universal to be able to produce all lines and produce orders in the plant closest to the customer.

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I'm hoping they don't start laying off NABI's workforce, like others said, but I'm wondering if this may be good news for NICE's next bus order and maybe a bigger chance of them choosing New Flyer.

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If you ask me...they'll probably offer the LFW for some time, but I think that ultimately, the 60-BRT is all that will be retained from this purchase on the product side. As for the plants, I think that all will remain open...however, I would not be surprised to see the Anniston facility expanded as Alabama is a right-to-work state.

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And the transaction has been completed
 

 

 

NEW YORK, June 21, 2013 /PRNewswire/ -- An affiliate of Cerberus Capital Management, L.P., one of the world's leading private investment firms, has completed the sale of North American Bus Industries, Inc. ("NABI"), the manufacturer of the world's widest range of transit buses, to New Flyer, the leading manufacturer of heavy-duty buses in the U.S. and Canada. The transaction closed today and had a total purchase price of $80 million, substantially all for the satisfaction of affiliate debt. An affiliate of Cerberus acquired NABI in 2006.

 

"This transaction is a testament to NABI's transformation into a leading transit bus and aftermarket parts supplier," said Chan Galbato, CEO of Cerberus Operations and Advisory Company ("COAC") and former Chairman of NABI. "Over the past seven years, Cerberus and its COAC team have helped NABI build a strong management team and skilled workforce, develop innovative product platforms, establish a highly efficient manufacturing footprint and attain one of the top reputations in the industry."

 

"We are proud to have supported NABI's successful operational and financial turnaround led by its President and CEO, Jim Marcotuli, and the talented

NABI management team," said Dev Kapadia, a Cerberus Managing Director. "NABI has made great strides under Cerberus ownership, developing and successfully marketing a variety of innovative new vehicles. Under our stewardship, the company has been transformed into a sustainably profitable enterprise.

 

New Flyer is a world-class company, and this combined entity will be positioned to provide customers with an enhanced product offering and superior customer service."

 

NABI has manufacturing operations in Anniston, Alabama, a centralized parts distribution center in Delaware, Ohio and a service center in Jurupa Valley, California. In addition to transit bus manufacturing operations, the company operates a sophisticated aftermarket parts business.

About Cerberus Capital Management, L.P.

 

Established in 1992, Cerberus Capital Management, L.P. is one of the world's leading private investment firms. Cerberus has more than US $20 billion under management invested in four primary strategies: distressed securities & assets; control and non-control private equity; commercial mid-market lending and real estate-related investments. From its headquarters in New York City and large network of affiliate and advisory offices in the US, Europe and Asia,

 

Cerberus has the on-the-ground presence to invest in multiple sectors, through multiple investment strategies in countries around the world.

About Cerberus Operations and Advisory Company, LLC

 

Cerberus Operations and Advisory Company, LLC, is an affiliate of Cerberus Capital Management, L.P., with over 100 operations and management executives from a wide spectrum of industries and disciplines. COAC assists Cerberus in sourcing, analyzing and monitoring portfolio company investments, and assists its portfolio companies in areas such as general operations and management, risk management, human resources, sales and marketing, information technology, legal, 6-sigma, and procurement.

 

 

http://www.cerberuscapital.com/news/cerberus_completes_sale_of_north_american_bus_industries_inc

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You know, this leaves me wondering if there will be a major consolidation across the board in regard to available facilities. It would be interesting if some New Flyer began to be service at the current Jurupa Valley facility.

 

 

And just to show off one of my city's assets to the transit industry, here's the NABI facility at 10305 Britcher Drive, Jurupa Valley, CA 92509.

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You know, this leaves me wondering if there will be a major consolidation across the board in regard to available facilities. It would be interesting if some New Flyer began to be service at the current Jurupa Valley facility.

 

 

And just to show off one of my city's assets to the transit industry, here's the NABI facility at 10305 Britcher Drive, Jurupa Valley, CA 92509.

What I was thinking is that New Flyer might take advantage of the current facilities, its also another way of winning bids as the closer the location, the better they could meet the demands of other TAs.

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What I was thinking is that New Flyer might take advantage of the current facilities, its also another way of winning bids as the closer the location, the better they could meet the demands of other TAs.

All great points raised. I could see a greater amount of work lined for the current workers in the future.

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Some of New Flyer and NABI's products were similar anyway.

 

The excelsior was in some ways similar to the COMPO, and the closest thing we had to that model. So since NABI says it can't produce that model anymore, then it would be nice if Flyer could perhaps combine it with the Excelsior; like adding the distinctive side curve.

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Some of New Flyer and NABI's products were similar anyway.

 

The excelsior was in some ways similar to the COMPO, and the closest thing we had to that model. So since NABI says it can't produce that model anymore, then it would be nice if Flyer could perhaps combine it with the Excelsior; like adding the distinctive side curve.

I honestly don't see any elements of the Compobus being combined with the Xcelsior, due to differences in structural and aesthetic build.

 

However NFI may prove me wrong once again.

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Honestly, they should never even have bothered setting up NABI in the first place.  I'm surprised that the company lasted as long as it did, especially considering that their products had nothing in common with those of the parent company (Ikarus of Hungary). The 416 was a far cry from the old 260 series, believe me.  Anyway, a few more years and then the regulators will probably move in to break up the whole thing... 

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Honestly, they should never even have bothered setting up NABI in the first place.  

 

Really?  The people who set it up now have 80 million reasons to be glad for bothering to set it up.

 

 

 I'm surprised that the company lasted as long as it did...

 

Lasted as long as it did?  The company was sold it didn't go out of business, apparently the people who run New Flyer see the value in NABI that you fail to see.

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Well ain't that somethin'. So if NJT were to start making considerations to replace their artics, and they close NABI's 60-BRT for example, would we see any noticeable differences?

With this happening I see them getting XD60s... I don't see them going with the BRT-style buses except maybe on the GO routes.

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I honestly don't see any elements of the Compobus being combined with the Xcelsior, due to differences in structural and aesthetic build.

 

However NFI may prove me wrong once again.

Is it possible that the new corporate owner would decide to keep the model in production (which I'd rather see anyway)?

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With this happening I see them getting XD60s... I don't see them going with the BRT-style buses except maybe on the GO routes.

 

If the NJDOT's axle load limts are an issue, I could see the LFS artic as being a better option---the wheelbase on that is much more even than on any other artic owing to its being a 39/23 or a 40/22 split (it has the same turning radius as an LFS rigid). That is why NJT has customized Neoplan artics. with a Nova LFS artic, the weight is more evenly spread between axles since the wheelbase is 244"/253".

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If the NJDOT's axle load limts are an issue, I could see the LFS artic as being a better option---the wheelbase on that is much more even than on any other artic owing to its being a 39/23 or a 40/22 split (it has the same turning radius as an LFS rigid). That is why NJT has customized Neoplan artics. with a Nova LFS artic, the weight is more evenly spread between axles since the wheelbase is 244"/253".

The NJDOT restrictions only apply in certain areas correct?

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Interesting takeaways from Monday's conference call with investors:

- New Flyer and Cerebus first started talking about a buyout three years ago. Marcopolo also pushed NFI earlier this year to look at buying NABI.

- Spoke briefly about the migration to the Xcelsior as New Flyer's primary heavy-duty bus offering. Approximately 90 percent of NFI's orders are now for the Xcelsior.

- New Flyer sees the 40LFW as being competitive against Gillig in bids based primarily on cost. Lots of flexibility in how they can now respond to RFQ's - they may actually bid both the 40LFW and Xcelsior in some cases.

- NABI's backlog is about 560 buses, mostly LFW's (sounds like the Dallas order primarily).

- NABI's bus operations were losing money a few years ago but the parts side of the business has remained profitable.

- No plans to build NFI or NABI buses at each other's plants right now, but may consider doing so in the future.

- NFI will be responsible for the settlement payout and support from the CTA 60LFW deal as part of the purchase.

 

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Interesting takeaways from Monday's conference call with investors:

 

- New Flyer and Cerebus first started talking about a buyout three years ago. Marcopolo also pushed NFI earlier this year to look at buying NABI.

 

- Spoke briefly about the migration to the Xcelsior as New Flyer's primary heavy-duty bus offering. Approximately 90 percent of NFI's orders are now for the Xcelsior.

 

- New Flyer sees the 40LFW as being competitive against Gillig in bids based primarily on cost. Lots of flexibility in how they can now respond to RFQ's - they may actually bid both the 40LFW and Xcelsior in some cases.

 

- NABI's backlog is about 560 buses, mostly LFW's (sounds like the Dallas order primarily).

 

- NABI's bus operations were losing money a few years ago but the parts side of the business has remained profitable.

 

- No plans to build NFI or NABI buses at each other's plants right now, but may consider doing so in the future.

 

- NFI will be responsible for the settlement payout and support from the CTA 60LFW deal as part of the purchase.

Interesting. Well, the LFW has proven itself a big competitor to Gillig over the years with smaller TAs such as Broward County, we'll have to see if it actually sells and lasts under NFI, I mean it is a valuable asset but they will have to sell much more of them than NABI was. Now that they have the LFW and MIDI they could really end up giving Gillig a run for their money, they just gotta win those contracts.

 

Anyway, I can definitely see New Flyer original products getting more orders from usual NABI customers. Especially in the artic field from TAs that don't really want the BRTs.

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Interesting takeaways from Monday's conference call with investors:

 

- New Flyer and Cerebus first started talking about a buyout three years ago. Marcopolo also pushed NFI earlier this year to look at buying NABI.

 

- Spoke briefly about the migration to the Xcelsior as New Flyer's primary heavy-duty bus offering. Approximately 90 percent of NFI's orders are now for the Xcelsior.

 

- New Flyer sees the 40LFW as being competitive against Gillig in bids based primarily on cost. Lots of flexibility in how they can now respond to RFQ's - they may actually bid both the 40LFW and Xcelsior in some cases.

 

- NABI's backlog is about 560 buses, mostly LFW's (sounds like the Dallas order primarily).

 

- NABI's bus operations were losing money a few years ago but the parts side of the business has remained profitable.

 

- No plans to build NFI or NABI buses at each other's plants right now, but may consider doing so in the future.

 

- NFI will be responsible for the settlement payout and support from the CTA 60LFW deal as part of the purchase.

 

With all of this, I wonder whats the status of the BRT model.

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- New Flyer and Cerebus first started talking about a buyout three years ago. Marcopolo also pushed NFI earlier this year to look at buying NABI.

 

Interesting, I was wondering about this the other day, I remember earlier this New Flyer or someone associated with New Flyer said to look for a big announcement soon... I wondered if it was something big like New Flyer acquiring another bus company it was passed of for something minor (the introduction of the MIDI), I wonder if this was the announcement they were talking about , but took longer or if it was just a coincidence.

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