Uber Freight has agreed to acquire Transplace, a provider of non-asset-based third-party logistics services, from TPG Capital for $2.25 billion. The purchase price includes up to $750 million in common stock of Uber Freight’s parent, Uber Technologies (NYSE: UBER) and the remainder in cash.
Transplace provides full transportation outsourcing, carrier contracting and negotiation, and freight brokerage services to more than 1,000 mid-market shippers and Fortune 500 companies. The company, led by CEO Frank McGuigan, was founded in 2000 and is based in Frisco, Texas.
TPG Capital acquired Transplace in October 2017 from Greenbriar Equity Group which had acquired the company in May 2013 from CI Capital Partners. In October 2020, an investment group, which was led by Greenbriar Equity Group, invested $500 million in Uber Freight’s preferred stock.
According to Uber Freight, the buy of Transplace creates one of the largest and comprehensive managed transportation and logistics networks in the world. Completion of the transaction will allow Uber Freight to serve more customers at all levels of the freight industry and will expand its presence into Mexico and add new capabilities in intermodal and customs brokerage.
“The acquisition will combine the world’s premier shipper network platform with one of the industry’s most innovative supply platforms, to the benefit of all stakeholders,” said Mr. McGuigan. “Our expectation is that shippers will see greater efficiency and transparency and carriers will benefit from the scale to drive improved operating ratios. All in all, we expect to significantly reduce shipper and carrier empty miles to the benefit of highway and road infrastructures and the environment.”
Last year, Uber Freight had revenues of just over $1 billion and an adjusted EBITDA of negative $227 million. Transplace’s EBITDA for 2021 is estimated at just over $100 million. Based on a valuation of $2.25 billion this equals an EBITDA valuation multiple of 22.5x. According to Uber Freight, the buy of Transplace will help the combined business to break even on an adjusted EBITDA basis by the end of 2022.
San Francisco-headquartered Uber Freight was founded in 2017 and has over 70,000 carriers in its network and thousands of shippers as customers, from small businesses to Fortune 500 companies, including AB Inbev, Nestle, LG, and Land O’Lakes.
“This is a significant step forward, not just for Uber Freight but for the entire logistics ecosystem,” said Lior Ron, the head of Uber Freight. “This is an opportunity to bring together complementary best-in-class technology solutions and operational excellence from two premier companies to create an industry-first shipper-to-carrier platform that will transform shippers’ entire supply chains, delivering operational resilience and reducing costs at a time when it matters most.”
“Our partnership with Transplace is a strong example of TPG Capital’s strategy to identify industry-leading tech-enabled services companies and invest behind them to drive sustained growth,” said Jack Daly, a partner at TPG Capital. “In a category that continues to benefit from several secular tailwinds, Frank and his experienced team have positioned the company as an innovative leader that is empowering customers of all sizes to improve and optimize their supply chains.”
TPG invests in a wide range of asset classes, including private equity, growth equity, real estate, credit, and public equity. The firm, founded in 1992, has more than $96 billion of assets under management and has headquarters in San Francisco, California, and Fort Worth, Texas.
Morgan Stanley & Co. is the financial advisor to Uber, and Goldman Sachs & Co. is the financial advisor to Transplace and TPG Capital.
© 2021 Private Equity Professional | July 23, 2021
