PERTH, Scotland - So, what's left of Coach USA that's for sale?
Not much.
Stagecoach Group PLC, the Perth-based parent company of Coach USA, has just a handful of pieces of the company left to sell - a few taxi and shuttle operations and Coach Canada, which has motorcoach operating units in Ontario and Quebec.
Since the Scottish company launched its aggressive program to sell most of the tour and charter companies, transit operations and taxi businesses acquired by Coach USA between 1995 and 1999, it has sold all it wants with the exception of Coach Canada and taxi businesses in Florida, San Diego, Minneapolis, Pittsburgh and Denver.
Principally what will remain after those operations are sold is Coach USA's strong motorcoach presence in the New York-New Jersey markets and upper Midwest, including Chicago.
The latest unit to sell is the huge Coach USA-owned taxi operation in Texas. A newly formed private investment group, called Texas Taxi Inc., has purchased the business for $28 million.
The Texas division was the largest of Coach USA's taxi units and included operations in Houston, San Antonio and Austin. Combined, the three locations have about 350 employees and upwards of 2,100 vehicles.
Another taxi division that reportedly is close to being sold is Pittsburgh Transportation, a taxicab operation that owns a string of companies, including Yellow Cabs of Pittsburgh and Express Shuttle USA.
Since the first of the year, a steady string of sales of Coach USA operations have been announced or completed. The combined value of the deals is close to $300 million, and represents more than 50 percent of the book value of Coach USA as it stood this spring.
Stagecoach Group Chief Executive Brian Souter says the sale of Coach USA businesses is about wrapped up. "We are making good progress in negotiations for the sale of our remaining taxi operations . . . and are continuing to pursue opportunities for the disposal of the Canadian region," he notes.
Stagecoach has taken a series of significant write downs at Coach USA during the past three years, reducing the carrying value of the company to $597 million. The biggest write down came early this year when Stagecoach lopped $910 million off the value of Coach USA. Stagecoach purchased Coach USA for $1.87 billion early in 1999.
If there is a silver lining in all of this, it certainly rests in the bank accounts of Souter and former Stagecoach and Coach USA CEO Keith Cochrane.
For switching from board chairman to chief executive, and executing the plan to streamline Coach USA and make other changes at Stagecoach, Souter won a 72 percent pay increase. His remuneration for fiscal 2003 was more than $1.26 million, up from a more modest $735,000 in fiscal 2002. Plus, Souter got a performance bonus of more than $500,000 and various other perks totaling more than $120,000.
Cochrane, who quit last year rather than do what Souter ended up doing, got a going-away present of $1.17 million in severance payments.
And who said the Scots are tight-fisted?