TFI International Buys UPS Division for US $ 800 Million
Montreal-based transport company TFI International (TFII, $ 81.42), formerly Transforce, acquires UPS Freight, a division of United Parcel Service (UPS, US $ 160.86, for US $ 800 million.
In Canadian dollars, the transaction amounts to just over $ 1 billion.
The company’s stock reacted well to the announcement and rose more than 24% to $ 80.90 on the Toronto Stock Exchange shortly after the market opened.
UPS Freight takes care of the transport and delivery of broken lots and full lots.
“Approximately 90% of the acquired businesses will be operated independently within TFI International’s broken lot transport business under its new name, TForce Freight, while the acquired full lot transport assets will join the full lot transport business. of TFI ”, explains the management of the Montreal company in a press release.
“The acquired assets include a network of 197 sites (of which 147 are owned) and, combined with TFI’s Canadian broken lot transport operations, will create what we believe to be the most comprehensive broken lot transport network in America. North, ”says TFI President and CEO Alain Bédard.
The latter speaks of a win-win agreement, as it allows TFI International to continue its expansion in the United States while aligning with UPS’s “Better not Bigger” vision.
UPS will continue to provide freight volumes and other services to TForce Freight after the transaction for a base term of five years.
UPS Freight generated approximately US $ 3 billion in revenue in 2020.
TFI says it intends to make targeted investments in the transportation fleet during the first 12 months following the transaction, “in order to reduce maintenance costs, improve efficiency and safety, and strengthen the customer service and driver satisfaction ”.