Uber Freight acquires Transpace for $2.25B - 3 minutes read
Uber Freight, the logistics business spun out of Uber in 2018, has acquired Transplace for about $2.25 billion from private equity group TPG Capital, according to regulatory filings. The deal announced Thursday will involve $750 million in Uber stock with the remainder in cash.
The acquisition of Transplace marks a ramping up of Uber Freight’s business as it aims to carve out market share in its existing markets and an expansion in Mexico. Uber Freight also sees the acquisition as a means to accelerate the company’s path to profitability and help the segment to break even on an Adjusted EBITDA basis by the end of 2022, according to the company.
The union will fold one of the largest managed transportation and logistics networks into Uber Freight’s platform, which connects truck drivers with shippers that need cargo delivered. Uber Freight’s brokerage will continue to operate independently from Transplace’s services, the company said.
“This is a significant step forward, not just for Uber Freight but for the entire logistics ecosystem,” Lior Ron, head of Uber Freight, said in a statement. “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.”
Transplace CEO Frank McGuigan said as a result, the combined company expects shippers will see greater efficiency and transparency. “All in all, we expect to significantly reduce shipper and carrier empty miles to the benefit of highway and road infrastructures and the environment,” he said.
Uber Freight launched in 2017. In August 2018, it was spun off into a separate business unit, a move that simultaneously allowed it to gain momentum and burn more cash. After spinning off of Uber, the freight company underwent an expansion. Uber Freight redesigned its app, an improvement that included adding new navigation features to make searching for and filtering loads easier to customize.
The company expanded to Canada and Europe. Uber Freight also established a headquarters in Chicago as part of its parent company’s broader plan to invest more than $200 million annually in the region, including hiring hundreds of workers. Uber said in September 2019 it would hire 2,000 new employees in the region over the next three years; most would be dedicated to Uber Freight.
Uber sold a stake in the freight business last year when investor group led by New York-based investment firm Greenbriar Equity Group committed to invest $500 million in a Series A preferred stock financing for the business. The deal valued the unit at $3.3 billion on a post-money basis.
Uber maintained majority ownership in Uber Freight and used the funds gained from Greenbriar to continue to scale its logistics platform, which helps truck drivers connect with shipping companies.
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