TFI to Buy Daseke for $1.1 Billion
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TFI International Inc. announced plans to purchase flatbed specialist Daseke Inc. for $1.1 billion, including debt.
Montreal-based TFI, which has been on an acquisition spree, agreed to pay $8.30 a share in cash for Daseke, a Texas-based operator with 4,900 large trucks and 11,000 flatbed and specialized trailers, according to a statement released Dec. 22. That’s a premium of 69% from the closing share price on Dec. 21.
Before the announcement of the deal, Daseke’s shares had fallen 48% over the prior two years amid the trucking industry's prolonged freight recession.
TFI said it will consider splitting into two publicly traded companies following the purchase of Daseke — one dedicated to truckload and another with all its other trucking assets, including less-than-truckload.
TFI became a large less-than-truckload carrier after purchasing the trucking unit of UPS Inc. in 2021 for $800 million. It has since been growing through such acquisitions, snapping up six trucking operations in 2023 alone before the Daseke deal, according to Bloomberg data.
TFI CEO Alain Bédard said, “This attractive acquisition is highly complementary to our existing operations and scales our truckload segment into a leading North American truckload transportation and logistics business. Daseke’s deep expertise in servicing a broad portfolio of specialized and industrial end markets such as high-security cargo, agriculture, manufacturing, and construction, is critical given the relative strength of specialized market dynamics today.” He added that TFI’s “immediate focus” will be on improving Daseke’s financial results.
TFI said Daseke will continue to operate its portfolio as part of TFI’s truckload segment. On a pro forma basis, TFI said the segment is expected to generate about $3.6 billion in total annual total revenue.
Daseke CEO Jonathan Shepko in a Dec. 22 release said, “We believe this transaction to be a tremendous outcome for our Daseke shareholders, providing a near-term liquidity event at a significant premium, and is consistent with our stated priority of progressing opportunities that maximize value for our shareholders. TFI has a proven track record of successfully executing acquisitions that deliver value for its customers, shareholders, partners and team members. We are very fortunate to be joining a like-minded organization who shares our commitment to strong customer relationships, services excellence and utmost respect for our professional drivers, each of which has fueled Daseke’s success over the last 15 years.”
Susquehanna International Group analyst Bascome Majors in a Dec. 22 note to investors said he expects TFI to drive long-term value for shareholders with both the acquisition and the potential spinoff, but he doesn’t think the latter action will take place right away.
“We wouldn’t expect the spin process to begin before [Daseke] is well-integrated and enjoying run-rate synergies, suggesting a separation might not close until late 2025 or early 2026,” Majors said. “We’d expect both companies to be led by veterans of TFI management, with TFI-like, M&A-driven capital allocation strategies and modestly leveraged capital structures.”
The boards of directors of both companies have approved the deal. The transaction is expected to close during the second quarter of 2024, Daseke said.
TFI ranks No. 4 on the Transport Topics Top 100 list of the largest for-hire carriers in North America and No. 6 on the TT less-than-truckload carriers list.
Daseke ranks No. 31 on the for-hire TT100.
Additional reporting by Transport Topics.
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