The trucking giant TFI International, of Quebec origin, sells a significant part of its activities in the United States and Mexico for an amount of 525 million US.
Posted at 11:43 a.m.
The transaction announced Monday morning with U.S. carrier Heartland Express, based in Iowa, involves business that accounts for nearly half of TFI’s recent U.S. revenue.
It involves full-load and temperature-controlled trucking operations in the United States, as well as logistics operations in Mexico.
According to information provided by TFI, these activities include some 2,800 employees, 2,000 tractor-trucks and 7,800 trailers. They accumulated $450 million in revenue in the recent full fiscal year in 2021, with operating profit of around $50 million.
In return, TFI retains its diversified consignment, specialized consignment and logistics activities in the United States. These activities cumulate approximately 545 million US in annualized turnover as of June 30, with an operating profit described at 31 million US.
According to TFI Chairman and Chief Executive Officer, Alain Bédard, the decision to sell a significant part of these activities in the United States stems from a “thorough evaluation” of all of the company’s assets. company with the goal of “boosting cash flow and return on investment” of the trucking business.
According to Mr. Bédard, “by focusing TFI’s US operations on higher-return LTL operations, as well as specialized truckload and logistics, this transaction will reduce our capital intensity. »
TFI also intends to use the net result of this transaction of 525 million US to “repay short-term debt” while increasing the capitalization of its trucking activities capable of “generating higher returns”.
On the stock market, where TFI is valued in all at nearly C$11.5 billion, investors in shares listed in Toronto and New York are reacting mixed to the announcement of this major resale of activities for half a billion US. .
In mid-session Monday, shares of TFI are trading down nearly 2% in New York to US$99, and down 1.7% in Toronto to C$130.
Meanwhile, the transport sector index on the American Stock Exchange, the “S&P 500 Transportation Index”, is also down 1.2% in mid-session on Monday.