TFI International has announced it will sell its U.S.-based CFI truckload and temperature-controlled fleets, as well as its Mexican logistics business, to Heartland Express for US$525 million.
The sale includes about 2,000 tractors, 7,800 trailers, and 2,800 employees. TFI will retain the dedicated and U.S. logistics segments and hopes to improve margins in its remaining businesses.
“We are incredibly pleased to announce this strategic transaction which is tremendously beneficial for all involved – a true win-win-win for TFI International, Heartland, and of course the CFI truckload, temperature-controlled and Mexican business itself, which is a strong cultural fit with Heartland and will have expanded opportunities to prosper with a leader in asset-based trucking,” said Alain Bedard, chairman, president and CEO of TFI International.
“For TFI, the decision to sell was reached following a thorough evaluation of our portfolio, and aligns perfectly with our longstanding focus on driving cash flow and ROIC [return on invested capital]. Specifically, by allowing TFI to concentrate its U.S. operations on higher-return LTL, asset-light logistics, and specialized truckload, this transaction will reduce our capital intensity, with some of the proceeds used to pay down debt in the near term and over time redeployed with the objective of generating higher returns.”
“We are proud to welcome the CFI team to our growing family of companies as soon as the transaction closes,” added Michael Gerdin, chairman and CEO of Heartland Express. “CFI will continue to operate from Joplin, Missouri, under its legendary brand and existing leadership. Together, our companies will offer customers the nation’s third largest asset-based, irregular route truckload capacity and drivers unparalleled opportunity. We have appreciated working with the teams from TFI International and CFI to reach this highly strategic and common-sense transaction for the benefit of all parties.”
TFI notes the businesses it is selling are the most capital-intensive in its portfolio. They generate about US$450 million a year in revenue. The deal is expected to close in the third quarter.
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