Quebec transportation and logistics giant TFI International announced on Monday the sale of some of its operations in the United States and Mexico for US$525 million (approximately C$680 million) to Heartland Express, a transportation company from Iowa.
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Under the agreement, the American firm will acquire TLC, CT & MX and CFI, which together have approximately 2,000 tractors, 7,800 trailers and 2,800 employees. CFI also relies on a network of approximately 200 transport partners in Mexico.
TFI is not leaving the United States, however, where it retains its specialized divisions and logistics services.
“We are very pleased to announce this strategic transaction which is extremely beneficial for all parties involved. This is a real win-win situation for TFI International, Heartland and of course for CFI’s TLC, CT & MX business which fits perfectly with Heartland’s culture and will have more opportunities to thrive. with a leader in asset-based lot transportation,” explained TFI President and CEO Alain Bédard.
TFI plans to “focus its U.S. operations on higher-yield LTL operations, low-asset-intensive logistics and specialized truckload transportation,” the executive added.
The proceeds from the sale of TFI’s subsidiaries will enable the company to repay part of its debt and make investments to increase its profitability.
In 2021, the businesses of TLC, CT&MX and CFI had generated revenues of approximately US$450 million and profits of approximately US$50 million. The specialized divisions that TFI retains had generated revenues of US$401 million, with a profit of US$21 million.
The transaction is expected to close in the third quarter of 2022.