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BusPatrol could explore acquisitions after majority sale

BusPatrol, an artificial intelligence-powered safety technology company, could look at making its first acquisitions, CEO Karoon Monfared said.

The Lorton, Virginia-based school bus safety company announced a significant strategic growth investment from GI Partners on 9 January. In an interview, Monfared said the investment represented a majority stake. Existing investor FIT Ventures remains a minority shareholder.

As the business continues to evolve, it could look at acquiring technologies beyond enforcement tools that are additive to its public safety mission, Monfared said. He added BusPatrol plans to remain focused primarily on the school bus market.

“We are a national company. We are agnostic as to geography and size,” he said, but acquisitions are most likely to be in the US. BusPatrol would prefer to acquire companies with a similar mission, he added.

BusPatrol partners with school districts, law enforcement agencies, and municipalities. The company’s technology automates the enforcement of school bus “stop-arm violations” — the illegal act of passing a stopped school bus that has its red lights flashing. The company installs its technology at no cost to the contracted school districts, outfitting each bus with a stop-arm camera equipment package. The company derives revenue by sharing the collected fines paid by violators. Beyond stop-arm enforcement, BusPatrol offers districts cloud-connected internal cameras and telematics data to ensure students safe transport to and from school.

The company, launched in 2017, raised USD 300m from Oaktree in January 2020, as previously reported. After the investment, the company went from 30 employees to more than 400 in less than two years’ time, according to the previous Mergermarket report.

The latest investment came through a preemptive approach—the company wasn’t thinking of launching a process until the beginning of this year, Monfared said. “GI followed our story over 18 months and got to know the management team,” he said. Speaking about GI Partners, Monfared said: “They understand Internet of Things connected technology businesses like ours.”

Monfared said the company is the fastest growing provider of internal cameras for school buses. “For school district transportation directors, monitoring [what goes on] inside school buses is as important as what happens outside,” he said.

He would not disclose revenue but said the company has 450 employees. BusPatrol’s  equipment was on 20,000 buses in 16 states last year, compared with only 1,500 buses when he joined the company about three years ago, Monfared said.

“We’re the only turnkey managed service provider for school districts,” he said, adding that “no one else has more than a few hundred buses.” Other players in the space include automated enforcement companies such as tolling companies and providers of red light cameras and speed cameras, and interior camera providers, a fragmented space with companies such as Gatekeeper, AngelTrax, SEON, and Verra Mobility.

Passing a stopped school bus is illegal in all 50 states, but only 24 states allow the use of stop-arm automated enforcement. BusPatrol is working to get legislation adopted in the rest of the country. The CEO noted that most recently, Florida passed legislation on 1 July.

In November 2021, company founder Jean Souliere, then CEO, told this news service the company might look at acquisitions to diversify into new verticals. Monfared, who became CEO about 18 months ago, said 27 million children are bussed in the US every day and the company currently protects over 1.5 million children, he said. There are 500,000 school buses in the US alone, he said.

The largest district the company serves is Suffolk County, New York, with nearly 5,000 buses.

Moelis served as exclusive placement agent to BusPatrol on the January transaction. Skadden, Arps, Slate, Meagher & Flom and Osler, Hoskin & Harcourt served as BusPatrol’s legal advisor. Ropes & Gray acted as GI Partners’ legal advisors and Alvarez and Marsal acted as its commercial advisors.