Heartland Express, Inc., headquartered in North Liberty, has announced it will acquire the Contract Freighters non-dedicated U.S. dry van and temperature-controlled truckload business and CFI Logistica operations in Mexico (“CFI”) from TFI International, Inc.
The $525 million purchase is the largest in Heartland Express history, according to a news release from Heartland.
The transaction does not include the CFI Dedicated or CFI Logistics U.S. brokerage operations.
CFI will continue to operate under its existing brand, management, and terminal locations.
After the purchase is finalized, Heartland Express will be the eighth largest truckload fleet and third largest irregular route, asset-based truckload carrier in the U.S., with estimated annual revenue of approximately $1.3 billion, estimated annual operating cash flow of approximately $260 million, and estimated total assets nearing $2 billion as of June 30.
The transaction value is anticipated to be funded with existing cash and borrowing under a new $550 million revolving and term loan agreement.
“We are thrilled to welcome CFI to the Heartland Express family of companies, where it will continue to operate from Joplin under its own brand and current leadership team,” said Michael Gerdin, chairman, president and CEO of Heartland Express. “CFI has exactly what we look for as we expand – significant scale, a respected and recognizable brand, capable management, safe and experienced drivers, a strong asset base, and a complementary terminal network. CFI’s strengths in the north-south midwestern corridor will add to our driver and customer capability, and their cross-border expertise will help us capitalize on the expected long-term freight volume benefits of nearshoring activity by manufacturers. At the same time, we can offer the CFI people a home that is entirely focused on their core – high-service, irregular route, asset-based truckload freight transportation. Over time, we expect to gain meaningful synergies and operate our consolidated business on a larger scale at our historical margins.”
“This transaction is a true ‘win-win-win’ for TFI, for CFI and for Heartland Express,” added Alain Bédard, chairman, CEO and president of TFI. “CFI is a great company, but the U.S. irregular route truckload business has become a small part of our portfolio. CFI’s people have been a small part of big companies for the past 15 years, and we wanted to find them a permanent home with a leader in the asset-based truckload industry to show what they can accomplish. Heartland Express is a truckload industry leader, and they respect and support CFI’s brand, leadership, and drivers.”
The purchase agreement is subject to customary terms and conditions, including regulatory approval. The transaction is expected to close in the third quarter of 2022.