XPO Logistics has completed the sale of its truckload business to North American transport company, TransForce, for approximately US$558 million (€504.7 million) in cash.
The divested truckload operation encompasses approximately 3,000 prime movers, 7,500 trailers and 29 locations that were part of the US$3 billion acquisition of Con-way in October 2015.
XPO Chairman and Chief Executive Officer, Bradley Jacobs, said, “TransForce is getting the 19th largest asset-based truckload carrier in the US, a highly experienced workforce, and a presence in the cross-border Mexico freight corridor.
“We divested these assets to concentrate on growing our value to customers in the areas where we're leaders in the industry: contract logistics, truck brokerage, less-than-truckload, last mile, intermodal, drayage, expedite and managed transportation.”
Jacobs continued, “This transaction strengthens our balance sheet and improves our long-term growth profile. In addition to deleveraging, the sale reduces our annual capex requirements, increases our return on capital, and lessens the cyclicality of our operations.”
XPO will continue to offer full truckload services to customers in the US, Mexico and Canada through its brokerage network.
Alain Bédard, Chairman, President and Chief Executive Officer of TransForce, stated the transaction creates several benefits for the firm.
“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.”
The divested operations, which have been reported as part of XPO's Transportation segment, were expected to generate approximately US$10 million of operating income for the remaining two months of 2016.