KPS Capital Partners has signed an agreement to sell its portfolio company Motor Coach Industries International to New Flyer Industries for approximately $480 million. KPS acquired MCI through a complex out-of-court restructuring and change of control transaction in 2010.
Motor Coach Industries (MCI) is a manufacturer of intercity coaches that are used in the tour, charter, line-haul, commuter and transit markets. The company is led by its CEO Richard Heller and has over 1,500 employees. The company, headquartered near Chicago in Des Plaines, IL, operates manufacturing facilities in Winnipeg, MB and Pembina, ND; has a master parts distribution center in Louisville, KY; and operates six service centers in North America (www.mcicoach.com).
“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,” said Jay Bernstein, a Partner of KPS. “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.”
During KPS’ ownership the company hired a new management team and improved MCI’s cost structure, labor productivity and plant efficiency. The firm also restructured underperforming business units and implemented new strategic plans for customers and product mix. In 2012, MCI established a partnership with Daimler AG and acquired exclusive distribution rights for Setra motor coaches and aftermarket parts in the United States and Canada.
“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,” concluded Mr. Bernstein.
KPS Capital Partners is the manager of the KPS Special Situations Funds, a group of private equity funds with approximately $5.6 billion of assets under management that invests in restructurings, turnarounds and other special situations. KPS targets manufacturing and industrial companies that are going through a period of transition or experiencing operating or financial difficulties. The firm’s portfolio companies have aggregate annual revenues of approximately $6 billion, operate 98 manufacturing plants in 23 countries, and employ over 42,000 people worldwide. KPS Capital Partners is headquartered in New York (www.kpsfund.com).
New Flyer Industries (TSE: NFI), the buyer of MCI, is a manufacturer of heavy duty transit buses headquartered in Winnipeg, MB. The company has additional manufacturing facilities in Crookston, MN (near Grand Forks, ND), St. Cloud, MN (north of Minneapolis) and in Anniston, AL (near Birmingham).
J.P. Morgan (www.jpmorgan.com) is the exclusive financial advisor to MCI for this transaction.
© 2015 PEPD • Private Equity’s Leading News Magazine • 11-10-15
