Bethesda, MD., -- American Capital Strategies, Ltd. (Nasdaq:ACAS) announced today that through an affiliate it has acquired Chance Coach, Inc., America's leading manufacturer of heavy duty small transit buses, from Chance Industries, Inc. Chance Coach's product line consists of small buses under 30 ft. in length and a heavy duty vintage streetcar replica, which are used for mass transit by municipalities, airports and private operators.
ACAS provided $16.8 million in funding consisting of debt and equity. An Employee Stock Ownership Plan (ESOP) will be established to include all of the employees in the ownership of the business, in addition to the investment being made by the Chance Coach management team.
John Freal, ACAS Principal said, "American Capital and the Coach employees are buying a solid company with an outstanding future. After having completed a very successful move to larger facilities, substantially increasing capacity, Chance Coach is poised for expansion. Chance has a two year production backlog including firm orders and options, which will provide an excellent foundation for their breakout into a stand-alone operation. We are excited about supporting the management and employee team in their new product development efforts and look forward to our relationship with a company that receives such high marks for quality and service."
The seller, Chance Industries, Inc., is the nation's largest manufacturer of portable amusement rides. In 1976, Chance Industries diversified its operations and entered the transit market by purchasing Minibus, Inc., which held manufacturing designs for a transit bus. In 1982, Chance Coach introduced its rubber-tired streetcar replica, which was first used by the city of San Antonio in its highly successful downtown revitalization. Future growth opportunities for the company are reflected by the demand from numerous municipalities re-sizing their bus fleets by adding smaller, and more cost effective buses. More than 90% of the vehicles Chance has manufactured are still in daily operation with many of them logging in excess of 1,000,000 miles. Chance Industries decided to sell the business in order to focus on opportunities in its core activities.
According to Scott Culbertson, President of Chance Coach, Inc. "The demand for the RT-52 Heavy Duty Bus and the AH-28 Replica Streetcar has increased over the last two years and the company now has a backlog of orders for 140 units. Current production is planned at 89 units for 1998 and 100 units for 1999 which will more than double the company's sales over 1997 levels."
American Capital President & CEO, Malon Wilkus commented, "This is our seventh transaction since the IPO in August and it is our fourth utilizing an ESOP. We have a wonderful opportunity to take a business which was ancillary to the seller's primary focus, team up with the employees and management and create a strong stand-alone business. Once again, ACAS' ability to work with the sellers and management, structure and fund the entire transaction, and move quickly proved to be a significant advantage."
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