Page 8 of 26 – SEC Filing EXHIBIT B
August 1, 2016
Special Committee of the Board of Directors
Blue Bird Corporation
402 Blue Bird Boulevard
Fort Valley, Georgia 31030
Attention: Daniel J. Hennessy
Dear Dan:
Spitfire Capital LLC (“Spitfire Capital”) is the
investment manager of The Spitfire Fund L.P., The Spitfire Qualified Fund L.P., Saunwin Domestic Equities Fund LLC and ABA Stocks
LLC (together, the “Spitfire Funds”). As of July 25, 2016, the Spitfire Funds owned in the aggregate 1,523,601 shares
of Blue Bird Corporation (“Blue Bird” or the “Company”), representing 7.3% of the Company’s common
stock outstanding. We initiated our position in the Company in June, 2015, and are the Company’s third largest common shareholder.
On July 20, 2016, American Securities LLC (“American Securities”)
submitted a non-binding indication of interest to the Special Committee of the Board of Directors of the Company for the acquisition
by ASP BB Holdings LLC (“Holdings”) of all of the outstanding fully-diluted equity of the Company not currently owned
by Holdings, based on a per-share valuation of $12.80 to $13.10 per common share (the “Proposal”). On July 26, 2016,
Spitfire Capital filed a Schedule 13D to reflect its intent to oppose the Proposal, and subsequently met with the Company’s
management team to further discuss its views. We are writing to reiterate our opposition to the Proposal and to outline our thoughts
on the Company’s valuation for the benefit of the Special Committee as it considers the Proposal.
The domestic school bus industry is growing and is in the mid-stage
of its recovery. As property taxes are a key funding source for school buses, school bus shipments are correlated with the U.S.
housing market. Since 2011, school bus shipments have grown at over 5% per year and are approaching the 30-year average of 30,530
shipments1. Blue Bird management has projected continued industry growth given
the sustained recovery in housing prices, growing student enrollment and the need to replace aged buses2.
Blue Bird is increasing its market share. Based on R.L. Polk
data, Blue Bird has grown market share from 23% five years ago to 30%3, in part
as a result of its innovative powertrain offerings. Blue Bird is the leading provider of alternative fueled school buses. The Company
has over six times the number of registered propane powered buses compared with its competitors4.
Blue Bird is also the first OEM to offer a gasoline-powered bus, which will provide an attractive, low price alternative to customers.
As a result of sustained industry growth and continued market share gains, we anticipate that Blue Bird will continue to grow its
bus shipments and revenue over the coming fiscal years. We attended the STN Expo in Reno, Nevada last week and were impressed with
the energy and enthusiasm expressed by Blue Bird’s dealers regarding the industry outlook and the Company’s product
line.
1
Source: R.L. Polk data and Blue Bird management (Roth Capital Partners Conference presentation dated March 13, 2016,
page 5, http://investors.blue-bird.com/presentations.aspx?iid=4042668).
2
Roth Capital Partners Conference presentation, page 6.
3
Roth Capital Partners Conference presentation, page 12.
4
Roth Capital Partners Conference presentation, pages 12 and 17.
Page 1 of 4
Follow Blue Bird Corp (NASDAQ:BLBD)
Follow Blue Bird Corp (NASDAQ:BLBD)
We may use your email to send marketing emails about our services. Click here to read our privacy policy.
EXHIBIT B
August 1, 2016
Special Committee of the Board of Directors
Blue Bird Corporation
402 Blue Bird Boulevard
Fort Valley, Georgia 31030
Attention: Daniel J. Hennessy
Dear Dan:
Spitfire Capital LLC (“Spitfire Capital”) is the
investment manager of The Spitfire Fund L.P., The Spitfire Qualified Fund L.P., Saunwin Domestic Equities Fund LLC and ABA Stocks
LLC (together, the “Spitfire Funds”). As of July 25, 2016, the Spitfire Funds owned in the aggregate 1,523,601 shares
of Blue Bird Corporation (“Blue Bird” or the “Company”), representing 7.3% of the Company’s common
stock outstanding. We initiated our position in the Company in June, 2015, and are the Company’s third largest common shareholder.
On July 20, 2016, American Securities LLC (“American Securities”)
submitted a non-binding indication of interest to the Special Committee of the Board of Directors of the Company for the acquisition
by ASP BB Holdings LLC (“Holdings”) of all of the outstanding fully-diluted equity of the Company not currently owned
by Holdings, based on a per-share valuation of $12.80 to $13.10 per common share (the “Proposal”). On July 26, 2016,
Spitfire Capital filed a Schedule 13D to reflect its intent to oppose the Proposal, and subsequently met with the Company’s
management team to further discuss its views. We are writing to reiterate our opposition to the Proposal and to outline our thoughts
on the Company’s valuation for the benefit of the Special Committee as it considers the Proposal.
The domestic school bus industry is growing and is in the mid-stage
of its recovery. As property taxes are a key funding source for school buses, school bus shipments are correlated with the U.S.
housing market. Since 2011, school bus shipments have grown at over 5% per year and are approaching the 30-year average of 30,530
shipments1. Blue Bird management has projected continued industry growth given
the sustained recovery in housing prices, growing student enrollment and the need to replace aged buses2.
Blue Bird is increasing its market share. Based on R.L. Polk
data, Blue Bird has grown market share from 23% five years ago to 30%3, in part
as a result of its innovative powertrain offerings. Blue Bird is the leading provider of alternative fueled school buses. The Company
has over six times the number of registered propane powered buses compared with its competitors4.
Blue Bird is also the first OEM to offer a gasoline-powered bus, which will provide an attractive, low price alternative to customers.
As a result of sustained industry growth and continued market share gains, we anticipate that Blue Bird will continue to grow its
bus shipments and revenue over the coming fiscal years. We attended the STN Expo in Reno, Nevada last week and were impressed with
the energy and enthusiasm expressed by Blue Bird’s dealers regarding the industry outlook and the Company’s product
line.
1
Source: R.L. Polk data and Blue Bird management (Roth Capital Partners Conference presentation dated March 13, 2016,
page 5, http://investors.blue-bird.com/presentations.aspx?iid=4042668).
2
Roth Capital Partners Conference presentation, page 6.
3
Roth Capital Partners Conference presentation, page 12.
4
Roth Capital Partners Conference presentation, pages 12 and 17.
| Page 1 of 4 |
