After School Transportation Business and Industry

searcher profile

September 27, 2021

by a searcher from Stanford University in San Diego, CA, USA

I'm currently looking at an after school transportation business in California and was curious to see if any others have looked at, diligence or bought in this industry. It seems like it could be a growing market, but I'm cautious about entrants like Uber and other upstarts coming in. Also, I hear echoes of labor shortages across many other industries, so not sure how much more amplified this might be here trying to find qualified bus and school drivers.

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commentor profile
Reply by an investor
from Universidade Católica Portuguesa in Lisbon, Portugal
There was a transaction in this space recently. EQT acquired one of the big ones in the space and I believe https://stnonline.com/news/eqt-infrastructure-completes-acquisition-of-first-student/
CDPQ acquired another one a couple of years back.

https://www.cdpq.com/en/news/pressreleases/student-transportation-inc-to-be-acquired-by-a-group-of-investors-led-by-cdpq

I've also looked at the space briefly in the past, what I would say is, look at contract structure and how the market actually works. Make sure you are not getting squeezed on margin, from raising fuel costs and also labor costs, while the schools don't have money to pay anymore. Licensing and qualification can be an interesting barrier.


My guess is both of them will pursue acquisition strategies, so get ready for some competition.


Hope this helps
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Reply by a searcher
from Northwestern University in New York, NY, USA
Looked at it briefly. There are a few behemoths in the space. Tough to be the "small fish" and deal with labor shortages, fuel issues, bid on large contracts, optimize routes, etc. Not impossible and wouldn't dismiss it fully for those reasons but that was my initial read.
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