TFI International Inc. is selling Contract Freighter’s truckload, temp control and Mexican non-asset logistics businesses (the CFI TL, TC & MX business) to Heartland Express, Inc. for US$525 million.
The CFI TL, TC & MX business provides truckload service offerings, including time-definite dry-van truckload, long-haul and short-haul freight transportation, reefer transportation and Mexico-based non-asset logistics services. It has 2,000 tractors, 7,800 trailers and 2,800 employees. CFI’s Mexican logistics business has a network of nearly 200 C-TPAT certified Mexico carrier partners.
TFI is keeping its dedicated and US Logistics (non-asset US based logistics services provider) divisions.
“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,” said Alain Bédard, chair, president and CEO of TFI.
Bédard said TFI will focus its US operations on higher-return LTL, asset-light logistics, and specialized truckload, to reduce the operation’s capital intensity. Some of the proceeds from the deal will be used to pay down debt in the near term.
CFI will continue to operate from Joplin, Missouri, under its legendary brand and existing leadership.
“We are thrilled to welcome CFI to the Heartland Express family of companies, where it will continue to operate from Joplin [Missouri] under its own brand and current leadership team,” said Michael Gerdin, chairman, president, and CEO of Heartland Express.
“CFI has exactly what we look for as we expand – significant scale, a respected and recognizable brand, capable management, safe and experienced drivers, a strong asset base, and a complementary terminal network. CFI’s strengths in the north-south midwestern corridor will add to our driver and customer capability, and their cross-border expertise will help us capitalize on the expected long-term freight volume benefits of nearshoring activity by manufacturers.”
The CFI TL, TC & MX Business generated approximately US$450 million in revenue before fuel surcharge and operating income of approximately $50 million in 2021.
For the Dedicated business, revenue and operating income for the trailing 12-month period ended June 30, 2022 was US$401 million and US$21 million, respectively. For the US Logistics business, revenue and operating income for the trailing 12-month period ended June 30, 2022 was US$146 million and US$11 million, respectively.
The transaction has been unanimously approved by the boards of both TFI and Heartland and is expected to close in the third quarter of 2022 once closing conditions, including regulatory approvals, are met.