UPS to sell Richmond-based freight biz for $800M
TFI International Inc. to acquire UPS Freight
Atlanta-based United Parcel Service Inc. will sell its Richmond-based UPS Freight unit to Canadian logistics company TFI International Inc. for $800 million, the package delivery company announced Monday.
UPS Freight provides less-than-truckload (LTL) shipments (used for small freight transportation) across all 50 states, Mexico, Puerto Rico, the U.S. Virgin Islands and Guam. The UPS business unit includes 197 North American facilities, more than 23,000 trailers and more than 6,300 tractors.
UPS Freight is one of the largest LTL carriers in the U.S, reporting approximately $3.14 billion in revenue in 2020. It was formed in 2005 after UPS acquired Richmond-based trucking company Overnite Corp. for $1.25 billion to expand its freight delivery business.
UPS Freight’s 14,500 employees will join TFI International’s operations, according to a presentation for investors.
UPS decided to sell the freight unit following an evaluation, which shows the decision “aligns with the company’s ‘bigger not better’ strategic positioning,” according to a company statement. Under the transaction, UPS Freight will continue to use its domestic package network to fulfill shipments for five years.
“We’re excited about the future and the opportunities this creates for both UPS and UPS Freight as part of TFI International Inc.,” UPS CEO Carol Tomé said in a statement. “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.”
The transaction is expected to close during the second quarter of 2021. Goldman Sachs & Co. LLC is serving as financial adviser and King & Spalding LLP is serving as legal adviser to UPS.