GREENWICH, CT: October 27, 2016. - XPO Logistics has sold its truckload business to Canadian logistics company TransForce for US$558 million in cash in order to reduce debt. As of June 30, 2016 the company had debt and long-term liabilities of US$6.7 billion.
The divested truckload operation encompasses approximately 3,000 tractors, 7,500 trailers and 29 locations that were part of XPO's October 2015 acquisition of Con-way.
The company said it would continue to offer full truckload services in North America and Mexico via its brokerage network.
According to TransForce, the acquisition is expected to generate annual revenue of US$530 million and an EBITDA of US$115 million in 2016. Combined with the company's current U.S. truckload business annual revenue is forecast at US$850 million.
XPO chairman and CEO Bradley Jacobs said the company had sold its truckload business to concentrate on contract logistics, truck brokerage, less-than-truckload, last mile, intermodal, drayage, expedite and managed transportation.
Alain Bédard, TransForce chairman, president and CEO said the purchase complements the company's existing capabilities and provides 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," he added.
TransForce has financed the XPO acquisition using an existing revolving credit facility coupled with a new CA$500 million loan underwritten by the National Bank of Canada and Royal Bank of Canada. The company reported a Q2 net profit of US$39.1 million on revenue of US$978 million. Transport America (above) is a TransForce truckload subsidiary based in Minnesota.