St. CLOUD, Minn. — Transit Holdings, Inc., a U.S. subsidiary of New Flyer Industries Inc., (NFI Group) has acquired ARBOC Specialty Vehicles, LLC, for $95 million.
ARBOC manufactures low-floor body-on-chassis, or cutaway, buses.
NFI Group said it is using available cash and its existing credit facilities to finance the transaction. The acquisition represents a continuation of the company’s growth and diversification strategy and was not subject to any pre-closing regulatory or antitrust requirements.
NFI Group also is the parent company of motorcoach manufacturer MCI.
Established in 2008, Middlebury, Ind.-based ARBOC manufactures buses ranging from 21 to 35 feet in length that operate in transit, paratransit and shuttle applications. ARBOC buses exceed U.S. federal fuel economy standards and Buy America requirements, and undergo safety testing beyond industry norms.
The North American cutaway bus market has an estimated annual volume of between 16,000 and 18,000 units, which is more than three times the current estimated size of the heavy-duty transit bus market and more than six times the current estimated motorcoach market, based on annual units produced.
Today, the installed base of cutaway buses is predominantly high-floor in configuration, with low-floor buses comprising less than 5 percent of the total cutaway market. ARBOC is the leader in the low-floor cutaway bus market having delivered more than 2,500 buses, or more than 70 percent of the estimated total low-floor cutaways sold in Canada and the U.S. over the past five years.
As the U.S. population ages and ease of access becomes more of a focus, NFI Group’s management believes ARBOC is ideally positioned to grow with the demand for low-floor cutaway and medium buses with greater accessibility, following the migration that occurred in heavy-duty transit space.
ARBOC is expected to deliver approximately 360 buses in 2017 with a revenue mix of $36.3 million for bus sales and $1.5 million for parts sales. That number is expected to grow to approximately 500 buses in 2018.
