Heartland Express (CCJ Top 250, No. 42) is acquiring Contract Freighters (CFI) non-dedicated U.S. dry van and temperature-controlled truckload business and CFI Logistica operations in Mexico for $525 million. The deal does not include the CFI Dedicated or CFI Logistics U.S. brokerage operations.
In late 2021, CFI, a subsidiary of TFI International (No. 7), reorganized and expanded into five service categories – three asset-based services with truckload, dedicated and temp-control; and two non-asset services, Mexico and Logistics.
At the close of the transaction announced Monday, Heartland Express will be the eighth largest truckload fleet and third largest irregular route, asset-based truckload carrier in the U.S., and will receive about 2,000 tractors, 7,800 trailers and 2,800 employees in the deal. CFI’s Mexican logistics business has a network of nearly 200 C-TPAT certified Mexico carrier partners.
CFI will continue to operate from Joplin, Missouri, under its own brand and current leadership team. CFI also owns facilities in Laredo, Texas; West Memphis, Arkansas; Taylor, Michigan; Sanford, Florida; and Nuevo Laredo, Tamaulipas, Mexico. These six locations will be acquired by Heartland and bring its total to 30 owned terminals across the U.S. and Mexico.
"CFI has exactly what we look for as we expand – significant scale, a respected and recognizable brand, capable management, safe and experienced drivers, a strong asset base and a complementary terminal network," said Heartland Express Chairman, President and CEO Michael Gerdin. "We believe CFI’s drivers will benefit from our extensive owned terminal network, in which we have invested millions of dollars to improve our drivers’ experience. As with every acquisition, our plan is to capitalize on each other’s strengths and improve consolidated profitability."
CFI’s strengths lie mostly in the north-south midwestern corridor and will add to Heartland Express' driver and customer capability. CFI's cross-border expertise "will help us capitalize on the expected long-term freight volume benefits of near-shoring activity by manufacturers," Gerdin added. "At the same time, we can offer the CFI people a home that is entirely focused on their core – high-service, irregular route, asset-based truckload freight transportation. Over time, we expect to gain meaningful synergies and operate our consolidated business on a larger scale at our historical margins.”
TFI Chairman, CEO and President Alain Bédard called the acquisition "a true win-win-win" for CFI-parent company TFI, CFI and Heartland Express, adding that the U.S. irregular route truckload business had become a small part of TFI's portfolio, and its disposal allows TFI to concentrate its U.S. operations on higher-return LTL, asset-light logistics and specialized truckload.
