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[Federal Register Volume 90, Number 5 (Wednesday, January 8, 2025)]
[Notices]
[Pages 1589-1591]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-00200]

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SURFACE TRANSPORTATION BOARD

[Docket No. MCF 21127]

TIP Minnesota Coaches Acquisition LLC, TIP MN Investments LP, and 
Tiger Infrastructure Partners Fund IV AIV LP--Acquisition of Control--
Marschall Line, Inc., Minnesota Coaches, Inc., Rehbein Transit Co., 
Inc., Ready Bus Company, Inc., Voyageur Bus Company, Inc., Minn-Dakota 
Coaches, Inc., and Faribault Transportation Service, Inc.

AGENCY: Surface Transportation Board.

ACTION: Notice tentatively approving and authorizing finance 
transaction.

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SUMMARY: TIP Minnesota Coaches Acquisition LLC, TIP MN Investments LP, 
and Tiger Infrastructure Partners Fund IV AIV LP (Applicants) filed an 
application seeking authority to acquire control of seven interstate 
passenger motor carriers: Marschall Line, Inc. (Marschall Line), 
Minnesota Coaches, Inc. (Minnesota Coaches), Rehbein Transit Co., Inc. 
(Rehbein), Ready Bus Company Inc. (Ready Bus), Voyageur Bus Company, 
Inc. (Voyageur Bus), Minn-Dakota Coaches, Inc. (Minn-Dakota), and 
Faribault Transportation Service, Inc. (FTS) (collectively, the Subject 
Carriers). The Board is tentatively approving and authorizing the 
transaction. If no opposing comments are timely filed, this notice will 
be the final Board action.

DATES: Comments must be filed by February 24, 2025. If any comments are 
filed, Applicants may file a reply by March 10, 2025. If no opposing 
comments are filed by February 24, 2025, this notice shall be effective 
on February 25, 2025.

ADDRESSES: Comments, referring to Docket No. MCF 21127, may be filed 
with the Board either via e-filing on the Board's website or in writing 
addressed to: Surface Transportation Board, 395 E Street SW, 
Washington, DC 20423-0001. In addition, send one copy of comments to 
Applicants' representative: Richard G.S. Lee, Cooley LLP, 1299 
Pennsylvania Avenue NW, Suite 700, Washington, DC 20004.

FOR FURTHER INFORMATION CONTACT: Brian O'Boyle at (202) 245-0364. If 
you require an accommodation under the Americans with Disabilities Act, 
please call (202) 245-0245.

SUPPLEMENTARY INFORMATION: According to the application, TIP Minnesota 
Coaches Acquisition LLC (TIP Minn. Coaches) is a Delaware limited 
liability company headquartered in New York, N.Y., and is not a 
federally regulated motor carrier, nor does it operate or have a 
controlling interest in any federally regulated motor carriers. (Appl. 
2.) TIP Minn. Coaches is wholly owned by TIP MN Investments LP (TIP MN 
Investments), a Delaware limited partnership headquartered in New York. 
(Id.) TIP MN Investments is in turn wholly owned by Tiger 
Infrastructure Partners Fund IV AIV LP, a fund and Delaware limited 
partnership, headquartered in New York.\1\ (Id. at 3.) Applicants state 
that neither TIP MN Investments, Tiger Infrastructure Partners Fund IV 
AIV LP, Tiger Infrastructure Associates GP IV LP, nor Tiger 
Infrastructure Partners LP are federally regulated motor carriers, nor 
do they operate or have a controlling interest in any federally 
regulated motor carriers. (Id. at 3-4.)
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    \1\ Applicants state that Tiger Infrastructure Partners Fund IV 
AIV LP is managed by Tiger Infrastructure Associates GP IV LP, a 
noncarrier Delaware limited partnership headquartered in New York. 
(Appl. 3.) More information about these entities and Tiger 
Infrastructure Fund LP, which is the private equity firm that 
established Tiger Investment Fund IV AIV LP, is included in the 
application. (Id.)
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    Applicants state that, under the proposed transaction, TIP Minn. 
Coaches would acquire control of the Subject Carriers from Patrick O. 
Regan (Seller) and other minority shareholders \2\ by purchasing a 
majority interest in a to-be-formed Delaware limited partnership called 
MNC Holdings, LP (Holdings).\3\ (Id. at 1-2.) According to Applicants, 
Holdings \4\ will ultimately hold 100% ownership of several entities, 
including the seven Subject Carriers, through 100% ownership of certain 
intermediate limited liability companies (Intermediate Companies).\5\ 
(Id. at 1-2, 4, 16.) Following the closing of the proposed transaction, 
Seller would continue to hold a significant stake in the Subject 
Carriers as well as retain an active role in senior management and as

[[Page 1590]]

an investor in the underlying businesses. (Id. at 2.) Applicants state 
that neither Holdings nor the Intermediate Companies would be passenger 
motor carriers. (Id. at 4.)
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    \2\ Those minority shareholders are Garrett O. Regan, Casey O. 
Regan, Michael R. Clark, Michael J. Krois, Thomas J. Severson, 
Michael S. Karlen, Troy J. Nelson, Angela J. Mattingly, and Michael 
C. Mattingly. (Appl. 4 n.6.)
    \3\ By decision served on November 14, 2024, the Board 
tentatively approved and authorized an application filed by Seller 
to control the Subject Carriers through a corporate reorganization 
in which Seller would become the majority shareholder in MNC Holding 
Company, a new entity created to serve as a holding company for the 
Subject Carriers and other noncarrier entities. Patrick O. Regan--
Acquis. of Control--Faribault Transp. Serv., Inc. (Regan), MCF 
21123, slip op. at 1 (STB served Nov. 14, 2024). Applicants state 
that they have filed the application in this proceeding based on the 
presumption that the approval and authority in Docket No. MCF 21123 
would become effective and the transactions described there will be 
consummated. (Appl. 2 n.3.) The Board's approval and authority in 
Docket No. MCF 21123 became effective on December 31, 2024. Regan, 
MCF 21123, slip op. at 1.
    \4\ Applicants note that, in Docket No. MCF 21123, Holdings was 
referred to as ``MNC Holding Company'' and ``Parent, LLC,'' while in 
this proceeding they refer to Holdings as ``MNC Holdings, LP.'' 
(Appl. 5.) Applicants state that, due to discussions that have taken 
place since the application in Regan was filed, there have been 
minor changes to the proposed corporate structure described in 
Regan. The Board finds that these differences are immaterial to the 
approval and authority granted in Regan and, therefore, no 
supplement or additional authority for those transactions is 
required.
    \5\ Specifically, Applicants state that Holdings will hold 100% 
ownership of a to-be-formed Delaware limited liability company 
expected to be named MNC Intermediate Holdings, LLC, which in turn 
will hold 100% ownership of a to-be-formed Delaware limited 
liability company expected to be named MNC Group Parent, LLC, which 
in turn will hold 100% ownership of MNC Borrower, LLC, a Delaware 
limited liability company, which in turn will directly or indirectly 
hold 100% ownership of the Subject Carriers. (Appl. 4 n.7.) More 
information about the expected corporate structure of Holdings and 
its direct and indirect subsidiaries, including the seven Subject 
Carriers, is included in the application. (See id., Ex. 1.) 
Applicants note that the names and number of the Intermediate 
Companies differ from the description provided in Regan. (Id. at 5.) 
As explained above, supra note 4, the Board finds these differences 
to be immaterial to its approval and authorization in Regan.
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    The Applicants describe the seven Subject Carriers to be acquired 
as follows: \6\
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    \6\ Further information about these motor carriers, including 
U.S. Department of Transportation (USDOT) numbers, motor carrier 
numbers, and USDOT safety fitness ratings, can be found in the 
application. (See Appl., Ex. 2.) Applicants state that, prior to 
closing, they expect each of these passenger motor carriers to be 
converted into limited liability companies. (Id. at 1 n.1.)
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    Marschall Line, whose principal place of business is in Farmington, 
Minn., is a direct subsidiary of Family Bus Service Inc. (Family Bus), 
a noncarrier, which will be a direct subsidiary of MNC Borrower, LLC, 
and an indirect subsidiary of Holdings. (Id. at 5, 6.) Marschall Line 
exclusively provides school bus transportation services, including 
general and special education transportation to and from school on a 
regular schedule, and school bus charter service for extracurricular 
activities and special trips. (Id. at 6-7.) Applicants note that, on 
limited occasions, the school bus charter service involves trips from 
Minnesota into Wisconsin and other neighboring states (depending on the 
location of those activities involving the school bus customers served 
by Marschall Line). (Id. at 7.) Marschall Line (operating in its name 
and through the assumed name Mid-County Bus Company) operates 
approximately 110 power units and employs approximately 118 drivers. 
(Id.)
    Minnesota Coaches, whose principal place of business is in 
Hastings, Minn., is also a subsidiary of Family Bus. (Id. at 6, 7.) 
Minnesota Coaches operates in its name and through the assumed names 
Hasting Bus Company, Big River Bus, and Big River Tours and provides 
both school bus service and motorcoach service on a charter basis. (Id. 
at 7.) Minnesota Coaches' school bus service includes general and 
special education transportation to and from school on a regular 
schedule, and school bus charter service for extracurricular activities 
and special trips, which, on limited occasions, involve transportation 
between Minnesota and neighboring states including Wisconsin. (Id. at 
8.) Minnesota Coaches also offers motorcoach contract service for 
universities, sports teams, and other business, as well as event-
specific charter services for weddings, conventions, and other events, 
concentrated primarily in the Minneapolis, Minn., St. Paul, Minn., and 
surrounding Twin Cities area, although it also has some interstate 
operations, primarily in Wisconsin, Iowa, Illinois, and Missouri. (Id. 
at 8-9.) Minnesota Coaches operates approximately 196 power units and 
employs approximately 174 drivers. (Id. at 8.)
    Rehbein, whose principal place of business is in Circle Pines, 
Minn., is also a subsidiary of Family Bus. (Id. at 6, 9.) Rehbein 
exclusively provides school bus services, which includes general and 
special education transportation to and from school on a regular 
schedule. (Id. at 9.) Rehbein also provides school bus charter service 
for extracurricular activities and special trips, which, on limited 
occasions, involves trips from Minnesota into Wisconsin or other 
neighboring states (depending on the location of those activities 
involving the school bus customers served by Rehbein). (Id.) Rehbein 
operates approximately 97 power units and employs approximately 91 
drivers. (Id. at 10.)
    FTS, whose principal place of business is in Faribault, Minn., will 
be a direct subsidiary of MNC Borrower, LLC, and an indirect subsidiary 
to Holdings. (Id. at 5, 10.) FTS is exclusively a school bus operator, 
providing student transportation service including general and special 
education transportation to and from school on a regular schedule. (Id. 
at 10.) FTS also provides school bus charter service for 
extracurricular activities and other special trips, which on limited 
occasions, involves trips from Minnesota into Wisconsin and other 
neighboring states (depending on the location of those activities). 
(Id.) FTS operates approximately 66 total power units and employs 
approximately 88 drivers. (Id. at 11.)
    Voyageur Bus, whose principal place of business is in Duluth, 
Minn., is a subsidiary of Metro Bus Service, Inc., a noncarrier, which 
will be a direct subsidiary to MNC Borrower, LLC, and an indirect 
subsidiary to Holdings. (Id. at 6, 11.) Voyageur Bus provides school 
bus transportation service that includes general and special education 
transportation to and from school on a regular schedule, and school 
charter service for extracurricular activities and special trips, with 
some trips on occasion involving transportation between Minnesota and 
neighboring states including Wisconsin. (Id. at 11.) Voyageur Bus also 
offers motorcoach contract services for universities, sports teams, and 
other business, as well as event-specific charter services for 
weddings, conventions and other events in the greater Duluth area. (Id. 
at 11-12.) Voyageur Bus's motorcoach services are conducted primarily 
in Minnesota, with some operations in Wisconsin, Iowa, Illinois, or 
other states across the U.S. based on customer demand for special event 
service. (Id. at 12.) Applicants state that Voyageur operates 
approximately 118 power units and employs approximately 125 drivers. 
(Id.) Applicants further note that Voyageur also operates a fleet of 
motorcoaches owned by Lake Superior Motorcoaches, Inc., a noncarrier 
subsidiary of Metro Bus Service, Inc., through a revenue-sharing 
arrangement. (Id. at 11 n.14.)
    Minn-Dakota, whose principal place of business is in Fergus Falls, 
Minn., is a direct subsidiary of Ottertail Coaches, Inc., a noncarrier 
direct subsidiary of Ottertail Transportation, Inc., which will be a 
direct subsidiary of MNC Borrower, LLC, and an indirect subsidiary of 
Holdings. (Id. at 6, 12-13.) Minn-Dakota provides school bus 
transportation service that includes general and special education 
transportation to and from school on a regular schedule, and school 
charter service for extracurricular activities and special trips. (Id. 
at 13.) Applicants note that some of these trips involve transportation 
between Minnesota and neighboring states including North Dakota. (Id.) 
Applicants state that Minn-Dakota also offers motorcoach contract 
service for universities, sports teams, and other business, as well as 
event-specific charter services for weddings, conventions, and other 
events in the Fergus Falls area. (Id.) Applicants state that some of 
Minn-Dakota's motorcoach services are conducted out of state, mostly 
within North Dakota and South Dakota, but a limited amount of activity 
also occurs in Iowa and Wisconsin, and the remainder is spread out 
nationally based on customer demand for special event service. (Id. at 
13-14.) Applicants state that Minn-Dakota operates approximately 14 
power units and employs approximately 34 drivers. (Id. at 13.)
    Ready Bus, whose primary place of business is in Rochester, Minn., 
will be a direct subsidiary of MNC Borrower, LLC, and an indirect 
subsidiary to Holdings. (Id. at 6.) Ready Bus provides school 
transportation service that includes general and special education 
transportation to and from school on a regular schedule, and school 
charter service for extracurricular activities and special trips. (Id. 
at 14.) Applicants note that, on limited occasions, some of these trips 
involve transportation between Minnesota and neighboring states 
including Wisconsin, depending on the location of the customer 
activity. (Id.) Ready Bus also offers motorcoach

[[Page 1591]]

contract service for universities, sports teams, and other business, as 
well as event-specific charter services for weddings, conventions and 
other events with service in Minnesota, Wisconsin, and neighboring 
states. (Id.) According to the application, approximately 70% of Ready 
Bus's motorcoach service is conducted within Minnesota or Wisconsin; 
most of the remaining service is regionally concentrated in Iowa, 
Illinois, Missouri, and Indiana, and the rest is spread out nationally 
based on customer demand for special event service. (Id. at 15.) 
Applicants state that Ready Bus operates approximately 59 power units 
and employs approximately 56 drivers. (Id.)
    Under 49 U.S.C. 14303(b), the Board must approve and authorize a 
transaction that it finds consistent with the public interest, taking 
into consideration at least (1) the effect of the proposed transaction 
on the adequacy of transportation to the public, (2) the total fixed 
charges resulting from the proposed transaction, and (3) the interest 
of affected carrier employees. Applicants have submitted the 
information required by 49 CFR 1182.2, including information 
demonstrating that the proposed transaction is consistent with the 
public interest under 49 U.S.C. 14303(b), see 49 CFR 1182.2(a)(7), and 
a jurisdictional statement under 49 U.S.C. 14303(g) that the aggregate 
gross operating revenues of the involved carriers exceeded $2 million 
during the 12-month period immediately preceding the filing of the 
application, see 49 CFR 1182.2(a)(5). (Appl. 16.)
    Applicants state that their proposed acquisition of control of the 
Subject Carriers will be consistent with the public interest. (Id. at 
17.) Applicants assert that the adequacy of the transportation 
currently provided by the Subject Carriers will remain intact, as they 
have no plans to change the nature of the transportation services 
currently provided by the Subject Carriers or to terminate any of the 
student or transit transportation contracts currently in place. (Id. at 
18.) Applicants also assert that neither they nor Tiger Infrastructure 
Fund LP (including any funds it manages) directly or indirectly control 
any other federally regulated motor passenger carriers operating in the 
United States and therefore own no businesses that would compete with 
the Subject Carriers. (Id. at 17.) Applicants further state that the 
Subject Carriers face significant competition to the school bus 
services and motorcoach services that they provide in the geographic 
areas in which they operate. (Id.) According to Applicants, they also 
plan to expand and modernize the fleet in order to provide reliable 
service to its current and future customers. (Id. at 18.) Applicants 
also state that they plan to retain the current management of each of 
the Subject Carriers, including their experienced safety managers at 
the corporate and local levels, and that the Seller will also retain a 
position in senior management and board representation, providing 
Applicants access to Seller's years of knowledge and experience with 
respect to the Subject Carriers and the industry more broadly. (Id.)
    With respect to fixed charges, Applicants state that they are 
financing the cost of the proposed transaction with a combination of 
debt and equity capital. (Id. at 19.) According to Applicants, they do 
not expect that these fixed charges will impact the Subject Carriers' 
ability to provide transportation services to the public because the 
debt used to finance the transaction is a secured credit facility based 
on customary terms appropriate for the asset value of Holdings; each of 
the Subject Carriers has a stable revenue stream from contracts with 
school districts, universities, and other institutional entities, which 
should be more than adequate to service existing and anticipated future 
debt; and the proposed transaction will enable the Subject Carriers to 
maintain future financial stability through access to considerable 
funds from Tiger Infrastructure Partners LP and its affiliates. (Id.)
    Applicants state that they do not expect the proposed transaction 
to adversely affect the interest of Subject Carrier employees, as they 
currently have no plans for employee layoffs or other staffing 
reductions, nor do they plan to adversely change any existing employee 
benefits. (Id.)
    Based on Applicants' representations, the Board finds that the 
acquisition of control of the Subject Carriers is consistent with the 
public interest and should be tentatively approved and authorized. If 
any opposing comments are timely filed, these findings will be deemed 
vacated and, unless a final decision can be made on the record as 
developed, a procedural schedule will be adopted to reconsider the 
application. See 49 CFR 1182.6. If no opposing comments are filed by 
the expiration of the comment period, this notice will take effect 
automatically and will be the final Board action in this proceeding.
    This action is categorically excluded from environmental review 
under 49 CFR 1105.6(c).
    Board decisions and notices are available at www.stb.gov.
    It is ordered:
    1. The proposed acquisition of control of the Subject Carriers is 
approved and authorized, subject to the filing of opposing comments.
    2. If opposing comments are timely filed, the findings made in this 
notice will be deemed vacated.
    3. This notice will be effective February 25, 2025, unless opposing 
comments are filed by February 24, 2025. If any comments are filed, 
Applicants may file a reply by March 10, 2025.
    4. A copy of this notice will be served on: (1) the U.S. Department 
of Transportation, Federal Motor Carrier Safety Administration, 1200 
New Jersey Avenue SE, Washington, DC 20590; (2) the U.S. Department of 
Justice, Antitrust Division, 10th Street & Pennsylvania Avenue NW, 
Washington, DC 20530; and (3) the U.S. Department of Transportation, 
Office of the General Counsel, 1200 New Jersey Avenue SE, Washington, 
DC 20590.

    Decided: January 2, 2025.

    By the Board, Board Members Fuchs, Hedlund, Primus, and Schultz.
Jeffrey Herzig,
Clearance Clerk.
[FR Doc. 2025-00200 Filed 1-7-25; 8:45 am]
BILLING CODE 4915-01-P
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