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March 11, 2024
TFI International Inc. Announces tuck-in LTL acquisition
NYSE: TFII | USD 148.35 | Outperform | Price Target USD 155.00
Sentiment: Positive
Our view. TFII today announced the acquisition of Hercules Forwarding, an LTL provider with an emphasis on intra-US and US-to- Canada cross-border transportation. The transaction represents roughly US$100MM in annualized revenue and, assuming margins in line with TFII’s LTL segment, ~US$20MM in EBITDA or 1% of our 2024 consolidated EBITDA estimate. While we do not expect the transaction to move the needle from an EBITDA perspective, we are nevertheless positive and view the transaction as likely accretive (terms not disclosed) and increasing the company’s scale. We continue to consider M&A a key catalyst for the shares and have a positive view on TFII continuing to capitalize on opportunities.
What happened? TFII announced today the acquisition of Hercules Forwarding, an LTL carrier with an emphasis on intra-US and US-to-Canada cross-border transportation. Hercules utilizes a 31-terminal network and operates more than 210 trucks, close to 600 trailers, and approximately 75 containers, generating more than US$100MM in annual revenues. Hercules’ non-union team focuses on direct shipper customers seeking high-quality, damage-free service across diverse end markets including consumer/ retail, HVAC/building products, automotive, industrial, 3PL, and food/beverage.
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