Uber Freight to acquire Transplace from TPG in deal valued at $2.25 billion

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Photo by CHUTTERSNAP on Unsplash

San Francisco-based Uber Freight, the trucking division of the rideshare company, announced Thursday, July 22, it is acquiring Frisco-based shipping software company Transplace in a deal valued at $2.25 billion.

Uber Freight will acquire Transplace from TPG Capital, private equity platform of alternative asset, Fort Worth and San Francisco-based TPG. TPG Capital acquired Transplace in 2017. The deal consists of up to $750 million in common stock of Uber Freight’s parent company, Uber Technologies Inc. (NYSE: UBER) and the remainder in cash. The deal follows several shifts by Uber, as it has disposed of its self-driving and flying taxi segment, while acquiring alcohol—delivery company Drizly and food delivery service Postmates.

Uber Freight’s acquisition of Transplace will create one of the leading logistics technology platforms, with one of the largest and most comprehensive managed transportation and logistics networks in the world. The transaction is subject to regulatory approval and other customary closing conditions.

“This is a significant step forward, not just for Uber Freight but for the entire logistics ecosystem,” said Lior Ron, 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.”

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“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 Frank McGuigan, CEO of Transplace. “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. Finally, we want to thank TPG for their partnership as we have worked together to position Transplace as a leader in supply chain innovation.”

Since Transplace’s acquisition by TPG Capital, the company  has invested heavily in technology and other growth initiatives to further bolster the company’s expansive, high-quality, customizable solutions for managing today’s supply chain. Digitization of the global supply chain and the rapid adoption of logistics technology and solutions continue to drive investment activity across TPG’s platforms.

“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, Partner at TPG Capital and Chairman of Transplace, and Alex Minasian, Principal 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. We thank the entire Transplace team for their partnership and wish them continued success in their next chapter.”

This transaction is expected to accelerate Uber Freight’s path to profitability and help the segment to break even on an Adjusted EBITDA basis by the end of 2022, according to the news release on the acquisition.

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Transplace was founded in 2000 and headquartered in Frisco. It has 3,100 employees across North America & Europe.

Morgan Stanley & Co. LLC is acting as financial advisor to Uber, and Cooley LLP and Sullivan & Cromwell LLP are serving as legal counsel. Goldman Sachs & Co. LLC is serving as lead financial advisor to Transplace and TPG Capital. Harris Williams is also serving as financial advisor. Kirkland & Ellis and Cleary Gottlieb are serving as legal counsel to Transplace and TPG Capital.