MONTREAL, Que. — TransForce announced today that it has acquired the North American truckload operation of XPO Logistics.
XPO Logistics is a top 20 carrier headquartered in Joplin, Mo. The business provides an integrated offering of point-to-point dry-van TL transportation services across the United States, and is one of the largest service providers of cross-border trucking into Mexico.
Thanks to the acquisition, TransForce has added approximately 3,000 tractors and 7,500 trailers to its name.
“We are very pleased with this acquisition,” said Alain Bédard, chairman, president and chief executive officer of TransForce. “With this transaction we take big steps forward towards major strategic objectives that we’ve been talking about for some time now, like increasing our US revenue and gaining critical mass in the US truckload. As a result of this transaction, nearly 50% of TransForce’s total revenue will now originate in the US and nearly 50% of our revenue will generate from our truckload segment…As we have discussed over the years, we believe that achieving these two goals could open the door to other corporate capital market transactions.”
The acquired business is expected to generate annual revenue of approximately US$530 million and EBITDA, a non-IFRS measure of approximately US$115 million in 2016. As well, combined with TransForce’s current US-based TL operations, the acquisition provides the company with annual US truckload run rate revenue of nearly US$850 million.
“This acquisition significantly strengthens TransForce’s presence in the North American truckload landscape with prominent market positions in domestic US and cross-border Mexico freight,” said Bédard. “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.
“We are also gaining important access to the Mexican market and we expect to benefit from this significant cross border trading activity.”
According to TransForce, the acquisition is partially financed with its existing revolving credit facility and a new $500 million acquisition facility which was fully underwritten by National Bank of Canada and Royal Bank of Canada.