Uber Freight to acquire Transplace

Uber Freight has signed a $2.25 billion deal to buy Transplace, a logistics and technology firm that manages shipping across the globe.

The move merges Uber’s digital truck broker platform with software that helps customers bring freight to market. Transplace celebrated the opening of a $50 million building in Rogers just last week. State leaders congratulated Transplace on its commitment to the growing region. More than 800 people work in the new building with room for hundreds more.

Transplace Chief Executive Officer Frank McGuigan has said the new building was the company’s largest investment.

“The Northwest Arkansas spirit of caring, results and learning and growing is part of the ethos of our culture and we never want to move from that,” McGuigan said last week.

As the industry struggles with capacity issues, rising costs and other volatile market headwinds, transportation companies are adjusting their operations and looking for technology and support for their supply chains.

What this acquisition allows is for Uber to collaborate with Transplace and create an “industry-first” platform that handles the needs of both shippers and carriers, Lior Ron, head of Uber Freight, said in a written statement.

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

The two companies entered into a definitive agreement on Thursday morning. The $2.25 billion deal, expected to close later this year, will be paid with a mix of stock owned by parent company Uber Technologies worth $750 million, and cash.

It is subject to regulatory approval and other closing conditions. TPG Capital, a private equity firm, is the seller.

After hearing the news, George Abernathy, former president of Transplace, was positive about the deal, saying how both pieces fit well despite their differences.

“It makes so much sense,” said Abernathy in an interview on Freight Waves, an industry publication where he is the president.

So does the timing, he noted. The deal happened less than a year after Greenbriar Equity Group, a New York equity firm with ties to Transplace, invested $500 million into Uber Freight and added two board seats to help manage and grow the company.

“It’s pretty clear that that fondness for that Transplace business model, that Greenbriar very well understood as they sold it back in 2017 to TPG, is something that maintains some level of intensity and interest and now has manifested itself in this really remarkable deal,” Abernathy said.

The acquisition is expected to give shippers access to better technology solutions across all transportation modes and services, and to give carriers the ability to collaborate directly with shippers within a single marketplace, according to Uber Freight’s investor filing.

Transplace, based in Frisco, Texas, is responsible for one of the largest managed transportation and logistics networks, overseeing more than $11 billion of freight and 62,000 users, according to its website. Offices are located across the country, as well as in Canada, Europe and Mexico.

Last year Transplace generated $77 million in earnings before interest, taxes, depreciation and amortization, up 18% over the course of four years, according to an investor presentation on Uber’s website. The company is expected to make more than $100 million this year.

When the acquisition is final, Uber Freight is expecting to become more profitable and break even on an adjusted earnings basis by the end of 2022.

Spokesmen with Uber and Transplace did not return messages for comment.