Q&A


STI's Denis Gallagher Talks Te State of Contracting, Atlantic Express Acquisition and Alt Fuels


WRITTEN BY RYAN GRAY N


Denis Gallagher, Founder, Chairman & CEO of Student Transportation, Inc.


o other national school bus contractor company has been growing as fast as Stu- dent Transportation Inc., it can be argued. Proof is in its 15-percent growth, year


over year, for the past 15 years or so since Denis Gal- lagher founded the company in 1996, he told Andy Busch last month on the radio podcast “Engage with Andy Busch” on VoiceAmerica. Te company’s growth strategy is what Gallagher


calls “smart acquisition.” Te third-largest contractor in North America continues to seek opportunities to acquire smaller companies, bid-ins and conver- sions, or the “ABC’s of growth” to grow the compa- ny at four to five times in cash flow. Te company also has a 97-percent contract retention rate since Gallagher started Student Transportation Inc. Tis growth was also buoyed recently with the


acquisition of Atlantic Express after that company went bankrupt late last year. And Student Transpor- tation Inc. is at the forefront of implementing clean energy for its school bus service. We sat down with Gallagher to learn more about


his views of the market and today’s challenges and opportunities for contractors and school districts.


School Transportation News: Can you provide an update on the acquisition of Atlantic


Express contracts and assets? Dennis Gallagher: Te acquisition of the At- lantic Express assets went extremely well — in fact, I would say as planned. We started a new company for that team called Mission School Transportation to have more of a California local name and for them to remember their “mission” as well. Tey are a fantastic group and have such a tremendous service reputation. We have renewed just about every con- tract we took over as part of the deal and have fully integrated the staff and team. Tey were excited to join with us as well and already are getting accus- tomed to our culture. Tey recently participated in the Employee Appreciation Week activities we had at all terminals.


STN: Why has STI identified propane as its alternative fuel path? How many propane buses are


42 School Transportation News June 2014


your companies now operating in North America? Gallagher: Propane is one of the four fuel types


we currently use (diesel, gasoline, CNG and pro- pane). It has grown the fastest within our fleet, but the majority of our fleet currently is diesel. I would say we have really enjoyed the new prod- uct and learning more about its positive attributes. We had no issues in the extreme cold temperatures this past year with our propane vehicles, and we learned a lot about improving efficiency through improved driver training. It is a lower cost-per- gallon equivalent than diesel but slightly less fuel efficient on MPG. So you have to weigh your ability to purchase right, as we do, and to train right to make a substantial financial impact. We project to run 2,000 alternative-fuel vehicles next year.


STN: Some voice concern about the availability of future grant funds for alternative fuels. What is


your perspective on this? Gallagher: I would say the government has


already cut back on some of the grant dollars and, again, every owner has to make his own decision. Alternative fuels are here to stay; the market will price the product, not the government.


STN: What concerns STI most about the


Obamacare mandate for large businesses? Gallagher: Obamacare is the law of the land


and we will work within the law to ensure we are in compliance. Every school district and contractor has to comply and we like level playing fields.


STN: What are the biggest obstacles to efficiency


when servicing school district clients? Gallagher: Efficiency in operations should be a mandate, not an obstacle. We are expanding our review of our own operation and of our customers where we share operations. Tere are public/private partnerships that are being ignored. Schools should take advantage of our expertise, our purchasing power and our ability to negotiate what’s best for our school customers. We should be leveraging the things government can do to lower costs like purchasing fuel and utilizing tax-free incentives


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