Dive Brief:
- TFI International plans to spin off Daseke, splitting the 4,900-truck carrier and its other truckload businesses into a separate company sometime in 2025, TFI Chairman, President and CEO Alain Bédard said during a Q4 earnings call Friday.
- Beyond touting the spinoff — in advance of the deal’s Q2 close, no less — Bédard openly envisioned other specialized truckload fleet owners selling their businesses to add scale to the spun-off company.
- “Maybe this spin-off is not just going to be about the TFI assets,” he said. “Maybe other assets will be part of that deal, OK? Because we have a value proposition that is second to none ... if they want to join us.”
Dive Insight:
Openly mulling a spin-off of a company before the ink is dry on its acquisition might seem strange.
But TFI teased the possibility when it announced the news, and it’s pursuing a similar strategy executed by XPO over the past few years. First, acquire to add scale and density. Then, separate out different businesses into pure-play companies to eliminate the dreaded “conglomerate discount” described by both TFI and XPO executives.
Bédard complimented Daseke’s operation as “very well run” and compared the deal favorably to the one for UPS Freight, the LTL carrier once known as Overnite Transportation, which TFI bought and rebranded as TForce Freight in 2021.
“UPS was a lot of work. It's a carve-out. It's complex. It's big,” Bédard said. “Daseke, to me, it's small, it's $1.5 billion revenue, $1.6 billion, $1.5 billion in the U.S., $100 million in Canada ... It's day and night, versus the UPS Freight deal, in terms of complexity, in terms of difficulty to bring the OR under 90.”
TFI wants the spun-off company to be a specialized truckload carrier, not just a dry van hauler, Bédard noted. The company sold its dry van truckload assets to Heartland Express for $525 million last year.
“We don't want to be in the van world,” Bédard said. “But we really like specialty truckload, the flatbed operation, the tank, and all that.”
