Marcopolo Takes A Flyer
Brazilian bus body builder Marcopolo announced that it has purchased a 19.99% share of Canada’s New Flyer for approximately $116 million. As part of the deal, Marcopolo will acquire 11,087,834 common shares to be issued by New Flyer Industries Inc. The purchase, which is expected to close in early March, is subject to regulatory approvals.
New Flyer, based in Winnipeg, is a global manufacturer of urban buses in Canada and in the United States that had net revenues of $926 million and produced 1800 units in 2011. The company operates three bus body’s plants — one in Winnipeg and two in the U.S. in St. Cloud and Crookston, Minn. — along with a components plant in Elkhart, Ind., and four distribution centers.
"The investment is aligned with the company’s growth strategy and puts definitely a milestone in the entrance of the company in the Canadian and American markets, two of the most sophisticated in the world," said José Rubens de la Rosa, Marcopolo’s general-director. "New Flyer has the experience in the manufacturing of high profile specification products and in the development and application of sustainable technologies, such as hybrid vehicles moved by alternative and renewable fuels."
This is the latest in a series of moves by Marcopolo, which has included a acquirring a 75% stake in Volgren, Australia’s largest bus body manufacturer, and a 51% share of Metalsur Carrocerias S.R.L, an Argentine company which specializes in manufacturing intercity bus bodies. Marcopolo also owns minority stakes in the Brazilian parts suppliers Spheros (heating/ventilation/air conditioning), WSUL (seating foam) and MVC (plastics).
New Flyer said it intends to use Marcopolo’s investment to support its growth strategy and diversification. The companies also signed a memorandum of understanding to explore opportunities of cooperation in engineering, technical and purchasing issues. The idea is to introduce Marcopolo technology and products into the Canadian and American markets through New Flyer, as well as introduce New Flyer branded technology and products into other markets.
The agreement also allows Marcopolo to name a member of the New Flyer Administration Council.