TransForce Acquires XPO Logistics’ North American Truckload Business
TransForce Inc., a transportation and logistics services provider, announced yesterday that a wholly-owned subsidiary of TransForce has acquired the North American truckload operation of XPO Logistics, Inc. The acquisition represents an important expansion of TransForce’s truckload and logistics services across North America.
The sale price was $558 million in cash. XPO will use the proceeds from the transaction to pay down debt.
XPO’s erstwhile truckload operation encompasses 3,000 tractors, 7,500 trailers and 29 locations that were part of the October 2015 acquisition of Con-way Inc. XPO will continue to offer full truckload services to customers in the United States, Mexico and Canada through its brokerage network. XPO is the second largest freight brokerage provider in the world.
With an operating history of over 60 years, the acquired business is a top 20 carrier headquartered in Joplin, Mo. The business provides an integrated offering of point-to-point dry-van truckload transportation services across the United States, and is one of the largest service providers of crossborder trucking into Mexico.
The acquired business is expected to generate annual revenue of approximately $530 million and earnings of approximately $115 million in 2016. Combined with TransForce’s current U.S.-based truckload operations, the acquisition provides the Montreal-based TransForce with annual U.S. truckload revenue of nearly $850 million, according to a Transforce statement.
“This acquisition significantly strengthens TransForce’s presence in the North American truckload landscape with prominent market positions in domestic U.S. and crossborder Mexico freight,” said Alain Bédard, chief executive officer of TransForce. “The acquisition complements our existing capabilities and gives us access to a diversified and blue-chip customer base. We have acquired a high quality truckload business with a rich heritage and demonstrated solid operating and financial performance. We believe we are investing into the truckload space at a critical time and are well-positioned to benefit from future growth opportunities.”
Besdies Truckload, TransForce companies provide services in the package and courier, less-than-truckload, and logistics segments.
“We divested these assets to concentrate on growing our value to customers in the areas where we’re leaders in the industry: contract logistics, truck brokerage, less-than-truckload, last mile, intermodal, drayage, expedite and managed transportation,” said Bradley Jacobs, chairman and chief executive officer of XPO Logistics. “This transaction strengthens our balance sheet and improves our long-term growth profile. In addition to deleveraging, the sale reduces our annual capex requirements, increases our return on capital, and lessens the cyclicality of our operations.”
XPO has two reporting segments: transportation and logistics. Its corporate headquarters is in Greenwich, Conn., USA, and its European headquarters is in Lyon, France.
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