Celerity Partners IV, LLC, Celerity AHI Holdings SPV, LLC, and All Aboard America! Holdings, Inc.-Control-Sureride Charter Inc. d/b/a Sundiego Charter Company, 64596-64597 [2013-25582]

Agencies

• Surface Transportation Board
• DEPARTMENT OF TRANSPORTATION

[Federal Register Volume 78, Number 209 (Tuesday, October 29, 2013)]
[Notices]
[Pages 64596-64597]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-25582]


-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

[Docket No. MCF 21055]


Celerity Partners IV, LLC, Celerity AHI Holdings SPV, LLC, and 
All Aboard America! Holdings, Inc.--Control--Sureride Charter Inc. d/b/
a Sundiego Charter Company

AGENCY: Surface Transportation Board, DOT.

ACTION: Notice tentatively authorizing finance transaction.

-----------------------------------------------------------------------

SUMMARY: All Aboard America! Holdings, Inc. (AHI), Celerity AHI 
Holdings SPV, LLC (Celerity Holdings), and Celerity Partners IV, LLC 
(Celerity Partners) (collectively, Applicants) have filed an 
application under 49 U.S.C. 14303 for their acquisition of control of 
Sureride Charter, Inc. d/b/a Sundiego Charter Company (Sundiego). The 
Board is tentatively approving and authorizing the transaction, and, if 
no opposing comments are timely filed, this notice will be the final 
Board action. Persons wishing to oppose the application must follow the 
rules at 49 CFR 1182.5 and 1182.8.\1\
---------------------------------------------------------------------------

    \1\ Due to the Government shutdown, this notice was not able to 
be published in the Federal Register within 30 days after the 
application was received. All dates and deadlines in this notice 
will be calculated based on the date of publication, October 29, 
2013.

DATES: Comments must be filed by December 13, 2013. Applicants may file 
a reply by December 30, 2013. If no comments are filed by December 13, 
---------------------------------------------------------------------------
2013, this notice shall be effective on December 14, 2013.

ADDRESSES: Send an original and 10 copies of any comments referring to 
Docket No. MCF 21055 to: Surface Transportation Board, 395 E Street 
SW., Washington, DC 20423-0001. In addition, send copies of comments to 
Applicant's representative: Mark J. Andrews, Strasburger & Price, LLP, 
Suite 640, 1700 K Street NW., Washington, DC 20006.

FOR FURTHER INFORMATION CONTACT: Jonathon Binet, (202) 245-0368. 
Federal Information Relay Service (FIRS) for the hearing impaired: 1-
800-877-8339.

SUPPLEMENTARY INFORMATION: AHI is a noncarrier corporation established 
under the laws of Delaware. A plurality of AHI's stock is held by a 
group of investors participating in Celerity Holdings, a noncarrier 
limited liability company organized under the laws of Delaware. 
Celerity Partners, the managing member of Celerity Holdings, is also a 
noncarrier limited liability company organized under the laws of 
Delaware. Applicants currently control two carriers, Hotard Coaches, 
Inc. (Coaches) and Industrial Bus Lines, Inc. d/b/a All Aboard America! 
(Industrial).\2\ Coaches and Industrial hold authority from the Federal 
Motor Carrier Safety Administration (FMCSA) as motor carriers of 
passengers (license nos. MC-143881 and MC-133171, respectively). 
Coaches operates in Louisiana and southern Mississippi, while 
Industrial operates in Arizona, New Mexico, and Texas.
---------------------------------------------------------------------------

    \2\ See Celerity Partners IV, LLC, Celerity AHI Holdings SPV, 
LLC, and All Aboard America! Holdings, Inc.--Control--Calco Travel, 
Inc., Hotard Coaches, Inc., and Industrial Bus Lines, Inc. d/b/a All 
Aboard America!, MCF 21044 (STB served May 11, 2012).
---------------------------------------------------------------------------

    Sundiego is a California corporation and is controlled through 
stock ownership by Richard and Beverly Ann Illes (Mr. and Mrs. Illes), 
noncarrier individuals residing in California. Sundiego holds authority 
from the FMCSA as a motor carrier of passengers (MC-324772) and holds 
an intrastate registration from the California Public Utilities 
Commission (CPUC) as a Class B charter-party carrier of passengers. 
Applicants state that Sundiego operates 58 full-sized motor coaches and 
9 smaller vehicles (including minibuses, vans, and a limousine). 
According to Applicants, Sundiego conducts charter, sightseeing, and 
various types of shuttle operations for a variety of customers out of 
its headquarters in National City, Cal., a suburb of San Diego. 
Applicants state that these operations are conducted to, from, and 
within California and adjoining states, as well as to Mexico. 
Applicants indicate that 65 percent of Sundiego's revenues are derived 
from contracted transit and dedicated shuttle operations, with the 
remainder from charter operations. Of those charter operations, airport 
transfers account for 10 percent and cruise ship transfers account for 
4 percent of Sundiego's revenues.\3\
---------------------------------------------------------------------------

    \3\ Applicants note that Sundiego also holds authority to 
operate a network of interstate regular route motor passenger common 
carrier operations involving the points of Los Angeles, El Paso, Las 
Vegas, and Denver. Applicants state that, because Sundiego does not 
currently operate any of these routes, they intend to file to have 
that authority revoked.

---------------------------------------------------------------------------

[[Page 64597]]

    Under the proposed transaction, Applicants seek permission for AHI 
(and for Celerity Holdings and Celerity Partners indirectly) to acquire 
100 percent control of Sundiego through a stock purchase agreement 
(SPA) between AHI and Mr. and Mrs. Illes. According to Applicants, top 
management at Sundiego would remain involved in the business after the 
acquisition, and Mr. and Mrs. Illes would become minority shareholders 
in AHI. Applicants state that closing of the proposed transaction is 
scheduled on or about December 10, 2013, if Board approval is obtained 
by then.
    Under 49 U.S.C. 14303(b), the Board must approve and authorize a 
transaction that it finds consistent with the public interest, taking 
into consideration at least: (1) The effect of the proposed transaction 
on the adequacy of transportation to the public; (2) the total fixed 
charges that result; and (3) the interest of affected carrier 
employees. Applicants have submitted information, as required by 49 CFR 
1182.2, including the information to demonstrate that the proposed 
transaction is consistent with the public interest under 49 U.S.C. 
14303(b), and a statement that Applicants' motor passenger carriers and 
Sundiego's aggregate gross operating revenues for the preceding 12 
months exceeded $2 million, see 49 U.S.C. 14303(g).
    With respect to the effect of the transaction on the adequacy of 
transportation to the public, Applicants state that the proposed 
acquisition would have no significant impact because Applicants do not 
intend to change substantially the physical operations historically 
conducted by Sundiego. Rather, Applicants anticipate enhancing 
operations by implementing vehicle sharing arrangements, by providing 
coordinated driver training and safety management services, and by 
centralizing various management support functions. With respect to 
fixed charges, Applicants state that their control of Sundiego would 
generate economies of scale that would reduce a variety of unit costs 
and that, with its increased market position, Applicants would be able 
to access financing on more favorable terms. In addition to better 
interest rates, Applicants expect that the combined carriers would be 
able to enhance modestly their volume purchasing power, thus reducing 
insurance premiums and achieve deeper volume discounts for equipment 
and fuel. Applicants state that the transaction would have a positive 
impact on employee interests, as the economies and efficiencies 
resulting from the proposed acquisition would directly benefit 
Sundiego's employees by maintaining job security and retaining or 
expanding the volume of available work.
    Applicants further state that the acquisition would have no adverse 
impact on competition, because the geographic markets in which Sundiego 
and Coaches/Industrial compete are adjacent, but do not significantly 
overlap. Industrial's primary service areas in Arizona, New Mexico, and 
Texas are west of Sundiego's California-based market. Applicants note 
that round trips generated by each carrier might extend into 
overlapping states, but the beginning and end points seldom, if ever, 
overlap between Sundiego and Coaches/Industrial. Applicants also state 
that Sundiego faces other competition in both charter and shuttle 
services in San Diego and Los Angeles. Further, Applicants note that 
services provided under contract and on a ``spot basis'' also face 
competition from local and nationwide operators. Applicants state that 
competition includes five locally-based carriers, three carriers in the 
Los Angeles area, and four large nationwide providers of service.
    On the basis of the application, the Board finds that the proposed 
acquisition is consistent with the public interest and should be 
tentatively approved and authorized. If any opposing comments are 
timely filed, these findings will be deemed vacated, and, unless a 
final decision can be made on the record as developed, a procedural 
schedule will be adopted to reconsider the application. See 49 CFR 
1182.6(c). If no opposing comments are filed by the expiration of the 
comment period, this notice will take effect automatically and will be 
the final Board action.
    Board decisions and notices are available on our Web site at 
www.stb.dot.gov.
    This decision will not significantly affect either the quality of 
the human environment or the conservation of energy resources.
    It is ordered:
    1. The proposed transaction is approved and authorized, subject to 
the filing of opposing comments.
    2. If opposing comments are timely filed, the findings made in this 
notice will be deemed vacated.
    3. This notice will be effective December 14, 2013, unless opposing 
comments are filed by December 13, 2013.
    4. A copy of this notice will be served on: (1) The U.S. Department 
of Transportation, Federal Motor Carrier Safety Administration, 1200 
New Jersey Avenue SE., Washington, DC 20590; (2) the U.S. Department of 
Justice, Antitrust Division, 10th Street & Pennsylvania Avenue NW., 
Washington, DC 20530; and (3) the U.S. Department of Transportation, 
Office of the General Counsel, 1200 New Jersey Avenue SE., Washington, 
DC 20590.

    Decided: October 23, 2013.

    By the Board, Chairman Elliott, Vice Chairman Begeman, and 
Commissioner Mulvey.
Jeffrey Herzig,
Clearance Clerk.
[FR Doc. 2013-25582 Filed 10-28-13; 8:45 am]
BILLING CODE 4915-01-P