KPS Capital Partners Completes Controlling Investment in Parent of Motor Coach Industries International

Largest North American Manufacturer of Intercity Highway Coaches

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Sep 20, 2010, 10:30 ET

NEW YORK, Sept. 20 /PRNewswire/ -- KPS Capital Partners, LP ("KPS") announced today the completion of a controlling investment, through an affiliate, in MCII Holdings, Inc., the parent company of Motor Coach Industries International, Inc. ("MCI" or the "Company"). The transaction is the result of a multi-stakeholder recapitalization of MCII Holdings sponsored by KPS. Financial terms of the transaction were not disclosed.

MCI is the largest manufacturer of intercity highway coaches in North America. The Company is the only "Buy America" compliant coach manufacturer in the industry and the premier motor coach supplier to North America's largest transit agencies. In addition, MCI is the leading supplier to private sector coach operators, including charter and tour, line-haul and scheduled-service operators. The MCI D-Series is the number one selling coach of all time and the MCI J-Series is the best selling coach of the last decade. The Company has the largest installed fleet of motor coaches in North America. MCI is also the industry's leading provider of aftermarket parts and service.

Jay Bernstein, a Partner of KPS, said, "MCI is universally recognized as the premium coach brand and the leading participant in the coach bus industry with a reputation for quality and durability that is second to none. We are very excited to partner with the Company's 1,500 employees in the U.S. and Canada to manufacture products in North America for North American customers, and to continue to provide MCI's customers with the highest levels of quality and service. As a result of the KPS-sponsored recapitalization, MCI is now conservatively capitalized and has the financial resources to fund its continued growth and investment in industry-leading innovation and technology."

KPS has considerable experience in the bus sector through its former ownership of New Flyer Industries, Ltd. ("New Flyer"), the leading manufacturer of transit buses in North America. Under KPS's ownership, New Flyer experienced significant growth in revenue and profitability, and became the industry leader in quality, delivery and customer service.

Miller Buckfire & Co., LLC served as financial advisor and Paul, Weiss, Rifkind, Wharton and Garrison LLP served as legal counsel to KPS with respect to the transaction.

About Motor Coach Industries International, Inc.

Motor Coach Industries, Inc. ("MCI") is the largest manufacturer of intercity highway coaches for the tour, charter, line-haul, schedule service, commuter transit and conversion markets in the U.S. and Canada. The company operates two manufacturing facilities in Winnipeg, Manitoba and Pembina, North Dakota, as well as seven sales centers and eight service centers in North America. MCI is also the industry's leading supplier of aftermarket parts for most bus makes and models. Headquartered in Schaumburg, Illinois, MCI has over 1,500 employees. Please visit www.mcicoach.com for more information.

About KPS Capital Partners, LP

KPS Capital Partners, LP is the manager of the KPS Special Situations Funds, a family of private equity funds with over $2.6 billion of committed capital focused on constructive investing in restructurings, turnarounds and other special situations. KPS has created new companies to purchase operating assets out of bankruptcy; established stand-alone entities to operate divested assets; and recapitalized highly leveraged public and private companies. The KPS investment strategy targets companies with strong franchises that are experiencing operating and financial problems. KPS invests its capital concurrently with a turnaround plan predicated on cost reduction, capital investment and capital availability. Typically, the KPS turnaround plan is accompanied by a financial restructuring of the company's liabilities. The KPS investment strategy and portfolio companies are described in detail at the firm's website: www.kpsfund.com

SOURCE KPS Capital Partners, LP