TFI International has agreed to acquire UPS Freight for about $800 million, the Canadian trucking and logistics company and UPS (NYSE:UPS) said Monday, in a deal that will transform it into a North American less-than-truckload juggernaut.
The deal, expected to close in the second quarter, will represent TFI’s largest acquisition to date in sheer dollars, dwarfing the $558 million it spent to buy CFI from XPO in 2016. It will bring TFI a comprehensive U.S. LTL network and a dedicated truckload business, which brought in over $3 billion in revenue in 2019.
“We’re excited by this very attractive opportunity to extend our long-standing record of successful growth through acquisition, which will vault TFI International to one of the largest North American LTL carriers,” TFI CEO Alain Bedard said in a statement.
UPS Freight will operate as TForce Freight. Its 14,500 employees will shift to the new TFI unit, which will also continue serving UPS’ LTL needs under a five-year agreement. UPS Ground customers will also be able to receive freight pricing.
After the acquisition closes, U.S.-based businesses will dominate TFI’s revenue stream. The UPS Freight deal follows the acquisition of Chicago-based third-party logistics provider DLS in September.
TFI has built itself into one of North America’s largest trucking and logistics companies by acquiring companies with struggling margins — and then aggressively turning them around.
The deal also represents TFI’s single-largest turnaround project. UPS Freight is expected to post a $463 million operating loss for 2020. It posted a $75 million profit in 2019 and a $26 million loss in 2018.
Bedard has signaled TFI’s desire to get into U.S. LTL through an acquisition. He told analysts that the DLS acquisition was a way for TFI to learn the U.S. LTL market.
Over the past two years, the Montreal-based company has been building out its asset-light U.S. logistics and final-mile operations through acquisitions to set the groundwork for tapping into the growth of e-commerce. Bedard has likened the business to a “diamond in the rough.”
UPS Freight, however, represents a very different animal — with 197 facilities, 147 of which it owns. It also includes more than 6,300 tractors and 23,000 trailers.
It also comes with a workforce that is over 75% unionized.
Michael
Anyone else noticing that the ltl market is dying? Amazon is killing it. If it can’t be shipped truckload it isn’t getting shipped. UPS took a 200 million loss on their nightmare XPO IS A 3rd party provider and those union jobs are gone.
Blow Out
Thanks for leaving my freight on the dock for three days UPS. You are what you eat; brown poo
Ernie Herrera
Are the Teamsters still in control in this Canadian Firm? Are UPS drivers simply screwed and have to reapply? At same rate?
Or was this a move to oust the Teamsters?
Anyone….anyone?
debra collins
What does this mean for the retirement plans in place?
Bill
It depends on if it is a pension or 401k (employee owns it).
If pension, I’d be very nervous. If the Union did their job then they would have transitioned pensions over a decade ago.
Cathy Jones
UPS has not delivered my package sent on 12/11/2020 to Australia. It was lost in Adeliade AU. and was sitting in a warehouse in Austrailia for 25 days not moving. Paid well over $400 for my package to be delivered to my son for by Christmas. Now on 1/11/2021..UPS started admitted it is lost and started a 15 day investigation that has also elapse with no delivery or refund..now I am looking into next step ..I need to get my refund from UPS and the value of the gifts I sent.
Dirk Digler
And if you had sent it thru another carrier you wouldn’t even be this far along you dumbass!
Dan
Almost wish you took them by hand…My Crystal Ball has never worked. Seems alot were shipped broken.
Tcs53
You’re mixing apples and oranges. UPS Freight is completely different than UPS. Yes they are owned by the same corporation but they operate in 2 completely different areas. UPS Freight is a LTL carrier formerly Overnite. Your complaint is with Buster Brown. UPS Freight was union I’m pretty sure TFI is not. Sounds like the drivers are going to get screwed. I hope not!
J Boh
Lol.. UPS Freight… 30% of their revenue.. and 80% of their problems.
It’s the same with FedEx.
William Kalvin
I foresee that Fed will be bought out by Amazon! With in two years! Fede offers nothing but shipping!
Steve Soley
Will this deal also include UPS Airfreight division
J Boh
Uh… no way.