Update November 15, 2021: Uber Freight has completed its acquisition of Transplace for approximately $2.25 billion in an all-cash transaction. As partial financing for this transaction, Abu Dhabi Growth Fund (ADG), D1 Capital, and GCM Grosvenor invested $550 million in Uber Freight.
Uber Freight, the rideshare giant’s trucking arm, entered into a definitive agreement today to acquire Frisco-based logistics software firm Transplace for approximately $2.25 billion.
The deal consisted of up to $750 million in common stock of parent company Uber, and the remainder in cash, the companies announced. Uber Freight is buying Transplace from TPG Capital, the private equity platform of Fort Worth- and San Francisco-based alternative asset firm TPG.
With the deal, San Francisco-based Uber Freight aims to create “one of the leading logistics technology platforms.” According to Transplace, it powers one of the largest managed transportation and logistics networks on earth.
The company’s tech-enabled services and solutions platform is backed by a team of domain experts, engineers, and data scientists—delivering best-in-class logistics management, strategic capacity, and cross-border services. Transplace said it aims to consistently improve supply chain performance and offer greater visibility and control of its customers’ logistics networks.
TPG acquired Transplace in 2017
Since Transplace was acquired by TPG Capital in 2017, the company has invested more heavily in growth initiatives and technology to boost its customizable supply chain management solutions. The digitization of the global supply chain—and the adoption of more tech-enables logistics solutions—has driven investment activity across TPG’s platforms.
In a category that continues to benefit from several secular tailwinds, TPG leaders lauded Transplace CEO Frank McGuigan and his team for positioning themselves as an “innovative leader that’s empowering customers of all sizes to improve and optimize their supply chains.”
“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,” Jack Daly, partner at TPG Capital and chairman of Transplace, and Alex Minasian, principal at TPG Capital, said in a combined statement. “We thank the entire Transplace team for their partnership and wish them continued success in their next chapter.”
Transplace has been making its own acquisitions, too. Last year we told you about Transplace acquiring LeanCor, which provides managed transportation services, supply chain consulting, and corporate training programs for manufacturing-centric shippers; ScanData, a firm offering parcel transportation management solutions (PTMS); and Lanehub, a cloud-based platform and community that helps shippers and carriers collaborate to reduce waste.
At the time, McGuigan said he and his team’s goal was “to advance the Transplace platform, through both innovation and acquisition, so that we can strengthen logistics performance of all shippers in our community with advanced technology, domain expertise, and scale.”
The next chapter
The deal comes at a time when the logistics industry is undergoing accelerated transformation, the companies said. Shippers are beginning to adapt operations to keep pace with capacity constraints and escalating transportation costs. And many are looking for more options in technology and support to modernize supply chain operations, so they can continue moving critical goods.
“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.”
“Built on the power of Uber”
Uber Freight launched in 2017 as a logistics platform that’s “built on the power of Uber.” Like its parent company, the division set out to reshape an industry with digital capabilities and transformed entrenched practices.
Uber Freight has always been intended to deliver reliability, flexibility, and transparency for shippers and carriers. The company says its freight pricing and booking can reduce inefficiencies and increase opportunities for its customer’s business growth and collaboration.
Those customers include more than 70,000 carriers and thousands of shippers, from small businesses to Fortune 500 companies.
With Transplace on board, Uber Freight expects to optimize the movement of freight across the entire marketplace and continue delivering best-in-class services to both shippers and carriers. The combined services—Uber Freight’s network of carriers and Transplace’s shipper technology and operational solutions—make for a fully scaled logistics platform.
Expanding into Mexico, growing capabilities
Once the transaction is completed, Uber Freight expects to serve substantially more customers, expand its presence into Mexico, and grow new capabilities in intermodal and customs brokerage.
“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,” McGuigan said in a statement. “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.”
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