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UPS puts $800 million price tag on trucking divisions in sales agreement with TFI International

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UPS puts $800 million price tag on trucking divisions in sales agreement with TFI International
The Environmental Protection Agency has reached a settlement with the private United Parcel Service to resolve violations of hazardous waste regulations at more than 1,100 facilities across 45 states and Puerto Rico, the agency said Wednesday, Oct. 19, 2022.

ATLANTA and MONTREAL — UPS and TFI International Inc. on Jan. 25 announced a definitive agreement to sell UPS Freight (UPSF) to TFI International for $800 million, subject to working capital and other adjustments. UPS Freight includes the company’s less-than-truckload (LTL) and truckload (TL) divisions. The agreement between UPS and TFI International allows UPS Freight to use UPS’ domestic package network to fulfill shipments for five years.

Approximately 90% of the acquired business will operate independently within TFI International’s LTL business segment under its new name, “TForce Freight,” while acquired dedicated TL assets will join TFI’s TL business segment. The transaction is subject to usual and customary closing conditions, including regulatory approvals.

“We’re excited about the future and the opportunities this creates for both UPS and UPS Freight as part of TFI International Inc. The agreement allows UPS to be even more laser-focused on the core parts of our business that drive the greatest value for our customers,” said UPS CEO Carol Tomé.

“We are pleased to announce this highly strategic transaction that will strengthen our service offerings to customers as well as our ongoing relationship with UPS. Our strategy of operating independent business units with a high degree of accountability is well-suited for building on UPS Freight’s strengths and improving margins over time,” said Alain Bédard, chairman, president and CEO of TFI International. “TForce Freight will continue to serve UPS’ ongoing LTL distribution needs, and UPS will continue to provide freight volumes and other services to TForce Freight after the transaction for a base term of five years. We also look forward to offering expanded strategic network opportunities to UPS in Canada. This transaction is a ‘win-win’, allowing TFI to continue our strategic expansion across the US and aligning with UPS’ ‘Better not Bigger’ strategic positioning.”

The transaction, which is subject to customary closing conditions and regulatory approvals, is expected to close during the second quarter of 2021. UPS expects to recognize a noncash, pretax impairment charge of approximately $500 million on its statement of consolidated income for the year ended Dec. 31, 2020.

With an operating history of more than 85 years, UPS Freight is one of the largest LTL carriers in the U.S., offering a full range of regional and long-haul solutions and an on-time delivery guarantee for all LTL shipments.

Under the agreement, UPS will retain responsibility for all pre-closing pension obligations, taxes, and accident and workers’ compensation liability claims and costs. TFI intends to make targeted investments in the LTL fleet in the first 12 months following the transaction, lowering maintenance costs, improving both efficiency and safety, and enhancing customer service and driver satisfaction, according to a company statement.

Goldman Sachs & Co. LLC is serving as financial advisor, and King & Spalding LLP is serving as legal advisor to UPS.

Morgan Stanley & Co. LLC and RBC Capital Markets are serving as financial advisors to TFI. Scudder Law Firm, P.C., L.L.O. is serving as legal advisor to TFI.

The Trucker News Staff

The Trucker News Staff produces engaging content for not only TheTrucker.com, but also The Trucker Newspaper, which has been serving the trucking industry for more than 30 years. With a focus on drivers, the Trucker News Staff aims to provide relevant, objective content pertaining to the trucking segment of the transportation industry. The Trucker News Staff is based in Little Rock, Arkansas.

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The Trucker News Staff produces engaging content for not only TheTrucker.com, but also The Trucker Newspaper, which has been serving the trucking industry for more than 30 years. With a focus on drivers, the Trucker News Staff aims to provide relevant, objective content pertaining to the trucking segment of the transportation industry. The Trucker News Staff is based in Little Rock, Arkansas.
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