New Flyer acquires ARBOC Specialty Vehicles

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December 01, 2017
ARBOC is a pioneer and North American leader in low-floor body-on-chassis (or
“cutaway”) buses.
• ARBOC has also introduced a medium-duty low-floor transit and shuttle bus based on
their own chassis design.
• $95 million cash purchase price representing an implied purchase multiple of
approximately 10.4 times forecasted 2017 adjusted EBITDA of $9.1 million.
• 2017 deliveries estimated to be 360 buses, with 2018 deliveries expected to be 40%
higher (of which 65% are already firm orders for 2018).
• Transaction is expected to be immediately accretive to earnings per share and free
cash flow per share (before synergies).
St. Cloud, Minnesota, USA – December 1, 2017: (TSX: NFI) Transit Holdings, Inc., a U.S.
subsidiary of New Flyer Industries Inc. (“NFI Group”), the largest transit bus and motor coach
manufacturer and parts distributor in North America, today announced that it has acquired 100%
of the equity interests in ARBOC Specialty Vehicles, LLC (“ARBOC”) for a purchase price of $95
million, subject to certain purchase price adjustments, including satisfaction of debt. NFI Group is
using available cash and its existing credit facilities to finance the transaction. The acquisition
represents a continuation of NFI Group’s growth and diversification strategy and was not subject
to any pre-closing regulatory or antitrust requirements.
Established in 2008, ARBOC is a North American pioneer and leader in low-floor body-on-chassis
(or “cutaway”) bus technology. These buses range between 21 and 35 feet in length, and operate
in transit, paratransit and shuttle applications. ARBOC buses exceed US federal fuel economy
standards, Buy America requirements, and undergo safety testing beyond industry norms.
ARBOC has raised the industry standards for cutaway bus passenger accessibility and comfort
over traditional high-floor cutaway vehicles.
The North American cutaway bus market has an estimated annual volume of between 16,000 to
18,000 units, which is more than three times the current estimated size of the heavy-duty transit
bus market, and more than six times the current estimated motor coach market, based on annual
units produced. Today, the installed base of cutaway buses is predominantly high-floor in
configuration, with low-floor buses comprising less than 5% of the total cutaway market.
ARBOC is the leader in the low-floor cutaway bus market having delivered more than 2,500 buses,
or more than 70% of the estimated total low-floor cutaways sold in Canada and the U.S. over the
past five years. As the U.S. population ages and ease of access becomes more of a focus,
management believes ARBOC is ideally positioned to grow with the demand for low-floor cutaway
and medium buses with greater accessibility, following the migration that occurred in heavy-duty
transit space.
Management expects ARBOC to deliver approximately 360 buses in 2017 with a revenue mix
comprising of $36.3 million for bus sales and $1.5 million for parts sales, and expected 2017
Adjusted EBITDA of approximately $9.1 million.

In addition to its cutaway bus product portfolio, ARBOC has introduced a medium-duty low-floor
transit and shuttle bus based on ARBOC’s own chassis design. The bus is currently completing
testing at the Altoona Bus Research and Testing Center under the Federal Transit Administration
(FTA) Model Bus Testing Program to ten-year structural durability standards. The bus has
received favorable market response and ARBOC has already received initial firm orders for
deliveries in 2018.
Management expects ARBOC will deliver approximately 500 buses in 2018, representing
significant growth over 2017. ARBOC’s current firm backlog for 2018 includes over 320 orders.
“The acquisition of ARBOC provides us with complementary product lines and a unique
opportunity to continue with growth and diversification, as NFI Group now has a full suite of transit
buses and motor coaches to offer to North American public transit agencies and private
operators,” said Paul Soubry, NFI Group’s President and Chief Executive Officer. “ARBOC is a
proven low-floor cutaway builder and provides us with an entry point into both the cutaway and
medium-duty transit bus markets, with high quality, proven and competitively priced products.”
Located in Middlebury, Indiana, ARBOC employs approximately 100 people from a 112,000
square foot facility, producing Buy America compliant vehicles in accordance with ISO 9001:2008
certified management systems. ARBOC has extensive expertise with diesel and natural gas
propulsion based on General Motors, Chrysler, Ford and Freightliner chassis, and will benefit
from NFI Group’s expertise in battery electric propulsion and its beginning development of
autonomous drive features from its Vehicle Innovation Center (VIC) in Anniston, Alabama.
“ARBOC will benefit from NFI Group’s strong balance sheet, broader bus market credibility,
expertise in bus design and manufacturing and strategic sourcing to support its growth,” said
Wayne Joseph, President of New Flyer’s Transit Bus business. “We anticipate exciting
collaboration to scale this business and anticipate synergies such as research and development
and part fabrication, which have not yet been fully quantified.”
ARBOC’s proven and experienced management team will remain in place, with President and
Chief Executive Officer Don Roberts reporting to Wayne Joseph. Don Roberts said, “We are
excited to continue ARBOC’s growth trajectory under the New Flyer umbrella. We believe that
this transaction is the right step for ARBOC to continue offering our customers innovative and
superior quality products.”
Wells Fargo Securities acted as the exclusive financial advisor to New Flyer on the transaction.
About NFI Group
NFI Group and its subsidiaries comprise the largest transit bus and motor coach manufacturer
and parts distributor in North America, now having 32 fabrication, manufacturing, distribution, and
service centers across Canada and the United States and employing almost 6,000 team

It is North America's heavy-duty transit bus leader and offers the largest transit bus product line
under the brand Xcelsior®

, incorporating the broadest range of drive systems available, including:
clean diesel, natural gas, diesel-electric hybrid, trolley-electric, and battery-electric. NFI Group
actively supports over 44,000 heavy-duty transit buses (New Flyer, NABI, and Orion) currently in
service, of which 6,400 are powered by electric and battery propulsion.
NFI Group is also North America’s motor coach leader offering the Motor Coach Industries Inc.
(MCI) J-Series, the industry’s best-selling intercity coach for 11 consecutive years, and the MCI
D-Series, the industry’s best-selling motor coach line in North American history. MCI is also the
exclusive distributor of Daimler’s Setra S 417 and S 407 motor coaches in the United States and
Canada. MCI actively supports over 28,000 coaches currently in service.
NFI Group also operates North America's most comprehensive parts organization, NFI PartsTM,
providing parts, technical publications, training, and support for its OEM product lines (transit
buses and motor coaches). All buses and coaches are also supported by an industry-leading
comprehensive warranty, service, and support network.
Further information is available on NFI Group websites at and The common shares of the NFI Group are traded on the Toronto Stock
Exchange under the symbol NFI.
Financial Terms and Information
All references to currency in this press release are stated in US dollars. The financial information
relating to ARBOC provided in this press release is based on or derived from ARBOC’s unaudited
financial statements prepared in accordance with U.S. GAAP and estimates of ARBOC’s
ARBOC’s “Adjusted EBITDA” referred to in this press release has been calculated by ARBOC’s
management and consists of earnings before interest, income taxes, depreciation, amortization,
product development costs and other non-cash charges and certain non-recurring charges.
Management believes Adjusted EBITDA is a useful measure in evaluating the performance of
ARBOC. However, Adjusted EBITDA is not a recognized earnings measure and does not have a
standardized meaning prescribed by U.S. GAAP or International Financial Reporting Standards
(“IFRS”) and may not be comparable to similarly titled measures used by other issuers. Readers
are cautioned that Adjusted EBITDA should not be construed as an alternative to net earnings or
loss determined in accordance with IFRS or U.S. GAAP as an indicator of ARBOC’s performance
or as an alternative to cash flows from operating, investing and financing activities determined in
accordance with IFRS or U.S. GAAP, as a measure of liquidity and cash flows.
In accordance with IFRS, NFI Group will consolidate the revenue, earnings and other financial
information of ARBOC with NFI Group’s financial information in its regularly reported financial

Forward-Looking Statements
This press release contains forward-looking statements relating to expected future events,
including, ARBOC’s expected revenues for 2017, expected Adjusted EBITDA for 2017 and
expected deliveries for 2017 and 2018, the integration of the acquired business into NFI Group’s
existing business and expected synergies, the diversification and growth of NFI Group’s combined
business, and the accretive effects of the transaction to earnings and cash flow of NFI Group.
Although the forward-looking statements contained in this press release are based upon what
management believes to be reasonable assumptions, investors cannot be assured that actual
results will be consistent with these forward-looking statements, and the differences may be

Actual results may differ materially from management expectations as reflected in such forward-
looking statements for a variety of reasons, including, risks relating to the achievement of

ARBOC’s business plan and budget for the remainder of 2017 and deliveries in 2018, the ability
to implement the operational changes necessary to achieve the intended synergies, acquisitions,
joint ventures and other strategic relationships with third parties (including liabilities relating
thereto), market and general economic conditions and economic conditions of and funding
availability for customers to purchase buses and to purchase parts or services, customers may
not exercise options to purchase additional buses, the ability of customers to suspend or terminate
contracts for convenience and the other risks and uncertainties discussed in the materials filed
with the Canadian securities regulatory authorities and available on SEDAR at
Due to the potential impact of these factors, NFI Group disclaims any intention or obligation to
update or revise any forward-looking statements, whether as a result of new information, future
events or otherwise, unless required by applicable law.
For further information, please contact:
Jon Koffman
Investor Relations
Ph: 320-316-4964

1330 Quintard Avenue
Anniston, AL 36201

PHONE: (256) 237-3536
FAX: (256) 237-0126

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