Student Transportation of America, Inc. Closes on $87 Million Growth Financing Facility.

Business Editors

HOWELL, N.J.--(BUSINESS WIRE)--Oct. 31, 2001

Student Transportation of America, Inc. (STA), Chairman and CEO, Denis J. Gallagher announced today that the company has completed a new equity and debt financing package totaling $87 million to continue its regional based growth strategy in target markets across the country.

STA engaged CIBC World Markets as agent to provide a private placement offering led by Wynnchurch Capital of Lake Forest, Illinois, a private equity fund with over $200 million of capital under management. Other equity investors included Rice, Sangalis, Toole & Wilson (RSTW) of Houston, Texas and GE Capital's Commercial Equipment Financing unit. Senior Subordinated Notes for the company were fully subscribed by RSTW, a privately held subordinated debt and equity fund with over $870 million of capital under management. This financing enhances previous equity capital contributions of GTCR Golder Rauner, LLC a private equity firm in Chicago that has sponsored the company since its inception. Simultaneously, Harris Nesbitt arranged and agented a new $60 million senior credit facility with leading financial institutions including GE Capital's Commercial Equipment Financing unit, LaSalle Bank and Heller Financial, Inc.

"We were over-subscribed for this package and were very pleased to have completed this financing in such a difficult market. It demonstrates our new investors' confidence in the company's results and the outstanding management team we have put together," commented Gallagher.

"We will continue to focus on rural and suburban markets where our tremendous growth potential as a local company, coupled with the resources and expertise of a national company, are a winning combination. Our regional operating teams in New England, Pennsylvania, New Jersey, California and Texas are well established and will be expanded through additional acquisitions and contract awards. We will also continue with our proven success in the privatization of the multi-billion dollar public sector school transportation market."

"This investment is core to our strategy of backing industry-leading executives to grow their business internally and through acquisition," said GTCR Golder Rauner Principal Vincent Hemmer. "We look forward to our continued partnership with Denis and his team to build upon the company's momentum."

Student Transportation of America is now the second-largest private provider of school transportation and management services in the United States. STA's senior management team has an average of more than 20 years of experience in the student and passenger transportation industry. The company was founded in 1997 by industry veteran Denis Gallagher and management in partnership with GTCR Golder Rauner, LLC.

You can learn more about STA by visiting www.RideSTA.com or calling [phone], ext. 101.