Ryder has placed Ryder/ATE up for sale. Ryder/ATE consists of ATE (transit contracting and management) and MLS (contract municipal fleet maintenance). ATE generated $275 million in contracting revenue alone last year.
Ryder Student Transportation (which is involved in the school bus contract services market) is not part of the sale.
Ryder decided to do this after a detailed analysis of the company by Morgan Stanley Dean Witter (MSDW). While the transit division is profitable, MSDW thought that Wall Street wasn’t giving Ryder credit in its stock price for the profitability of this division, and suggested that Ryder sell it. While no bidders have been named, the acquisition market for transit contractors has been particularly active of late, especially fueled by the British-based multinational, multimodal operators National Express and Stagecoach Holdings Plc.
In a letter to clients which was obtained by Transit-Center.com, Ryder/ATE President John Dorr explained: “To enable Ryder to focus on its core integrated businesses, the decision was made to separate those businesses not integral to Ryder’s refined business strategy. Therefore, the decision was made to seek a buyer for Ryder/ATE, Inc. This decision is part of Ryder’s overall strategy to affirm its position as a leading provider of global third party logistics, truck leasing and rental, and student transportation services....”