TFI International plans to redomicile to the U.S., the carrier announced in its Q4 earnings release.
The Montreal, Quebec-based trucking giant, which owns Daseke and TForce Freight, said 70% of its operations and nearly half of its shareholders are based in the U.S.
TFI’s headquarters will remain in Canada, and there are no intentions to relocate staff or offices. But shifting its incorporation is designed “to better align with our shareholder base and commercial presence,” CEO Alain Bédard said on a Q4 earnings call Thursday.
“This is an evolution of TFI,” the CEO said, noting that the move is subject to shareholder approval.
The company has operated in the U.S. since 2011, following its Speedy Heavy Hauling acquisition the prior year, and it has traded on the New York Stock Exchange since February 2020.
Share price appears to be an immediate focus for TFI, as the company also announced a quarterly dividend of 45 cents per common share, 13% higher than the same quarter last year. The dividend was paid on Jan. 15.
Redomiciling is “not at all related” to the second Trump administration's push for companies to do more business domestically, a TFI spokesperson told Trucking Dive in an email.
But it could bring TFI advantages related to foreign exchange rates and U.S. Defense Department contracts, Bédard said on the call. TD Cowen analysts pointed out other benefits that could boost the company’s share price.
Redomiciling allows the company to be included in major indices, likely the S&P MidCap 400 and Russell 1000, analysts Jason Seidl, Elliot Alper and Uday Khanapurkar wrote in an investor note Wednesday.
Schneider National’s shares gained 9% in the week following its announced inclusion in the S&P SmallCap 600 in July last year, the analysts wrote.
Old Dominion Freight Line’s shares gained 2% in the month that it was added to the S&P500 in 2019, they wrote, reminding investors the modest increase came as it was also replaced in the S&P MidCap 400.
Foreign exchange rate fluctuation is another motivation: It hurt TFI’s earnings per share by 3 cents last quarter, Bédard said on the earnings call.
“Every one penny fluctuation of Canadian dollar per U.S. dollar tends to impact, either positively or negatively, our annual EPS by about two cents,” the CEO said.
The company declined to comment about whether the move might make its U.S. LTL M&A ambitions easier. The CEO nodded to another concern about the company’s foreign ownership, however, mentioning a subsidiary’s Department of Defense contracts on the earnings call.
“Because we are a foreign owner, it creates a little bit of issues with us,” Bédard said on the call. “The fact that we are a U.S. corp[oration] — that will help us. ... I really believe the U.S. is the best place to be in the world, in terms of business.”
