By John D. Schulz · January 25, 2021
UPS is selling its UPS Freight less-than-truckload (LTL) unit to TFI International Inc., a Canadian holding company that is parent to truckload giant CFI and other transport entities, for $800 million, subject to working capital and other adjustments. The company will rebrand as “TForce Freight” under Canadian ownership.
The sale of UPS’s LTL and dedicated truckload units shakes up the staid $46 billion LTL sector at a time when most large LTL companies, even including once-troubled Yellow Corp., are making solid profits.
Richmond, Va.-based UPS Freight did an estimated $3 billion in business while ranking in the top 10 of LTL carriers last year, according to analysts. The $800 million sale price is believed to be a bargain for a once-profitable LTL company that UPS bought from then-Overnite Transportation for $1.25 billion in 2005.
TFI said approximately 90% of the acquired business will operate independently within TFI International’s LTL business segment under its new name, “TForce Freight.” The acquired dedicated TL assets will join TFI’s truckload business segment that includes Joplin, Mo-based CFI. The transaction is subject to usual and customary closing conditions, including regulatory approvals.
Alain Bédard, chairman, president and CEO of TFI International, called the acquisition a “highly strategic transaction” that will strengthen its service offerings to customers as well as our ongoing relationship with UPS.
“Our strategy of operating independent business units with a high degree of accountability is well-suited for building on UPS Freight’s strengths and improving margins over time,” Bedard said.
TForce Freight will continue to serve UPS’ ongoing LTL distribution needs, and UPS will continue to provide freight volumes and other services to TForce Freight for a base term of five years after the transaction, both companies said.
“We also look forward to offering expanded strategic network opportunities to UPS in Canada,” Bedard added. “This transaction is a ‘win-win’, allowing TFI to continue our strategic expansion across the US and aligning with UPS’ ‘Better not Bigger’ strategic positioning.”
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