Atlantic Express Transportation Group Announces Recapitalization by Greenwich Street Capital Partners.

STATEN ISLAND, N.Y.--(BUSINESS WIRE)--Nov. 5, 1998--Atlantic Express Transportation Group Inc. and Greenwich Street Capital Partners Inc. completed a transaction allowing an affiliate of Greenwich Street to acquire a majority of the common stock of AETG.

The founder of Atlantic Express, Domenic Gatto, will retain a sizeable stock position in AETG and shall remain chief executive officer and president of the company. Gatto said, "We are excited about having a large, diversified equity investor to sponsor Atlantic Express. Going forward, this transaction will provide us with more access to capital and equity markets and will enhance our plan to continue grow and take advantage of the dynamics of our industry."

"Greenwich Street is excited about the future growth prospects of Atlantic Express and the commitment of Domenic Gatto to continue to own an equity stake in the company," said Sanjay Patel, senior managing director of Greenwich Street. Patel added, "We did a rigorous study of AETG, its management style, reputation, proven track record, high customer retention, and business strategies. Domenic Gatto will continue to lead and grow the company, together with his senior management team, to make Atlantic our foundation to expand in the transportation sector."

Gatto said, "It will be business as usual. The management team of Atlantic Express will remain with the company and we will continue our strategy which has propelled us to become one of the largest providers of school bus transportation in the United States. With incentives in place for senior management, we are all excited and confident that we can increase the value of our company for our new investors and partners."

Atlantic Express is the third largest provider of school transportation in the country, operating a fleet of approximately 4,300 vehicles from 32 facilities across the nation. The company has 95 contracts with various school districts in New York, Missouri, California, Pennsylvania, Connecticut and New Jersey. In addition to school bus transportation operations, the company is also one of the largest providers of municipal paratransit service having contracts with various transit authorities of New York, Pennsylvania, New Jersey, Kentucky and Colorado. The company also operates fixed route bus service, charter line runs, express commuter service, pre-kindergarten and medicaid transportation and bus sales, leasing and service. For fiscal year 1998, the company generated revenues of approximately $262 million. Revenues for fiscal year 1999 are projected to be approximately $300 million.

Greenwich Street Capital Partners is a New York based private equity firm managing an investment fund with approximately one billion dollars.