Uber Technologies Inc.’s
Freight unit is buying technology-focused logistics services provider Transplace in a cash and stock transaction deal worth about $2.25 billion that extends the ride-hailing giant’s reach into the U.S. domestic shipping sector.
Uber reached an agreement to acquire Dallas-based Transplace from TPG Capital, the private-equity arm of investment firm TPG. Under the agreement, Uber will pay up to $750 million in common stock of Uber Freight’s parent company and the rest in cash to TPG Capital.
The acquisition comes as San Francisco-based Uber is seeking to bulk up delivery operations beyond its core ride-hailing operations built on its app matching people to a fleet of drivers, a business that has taken a hit as the Covid-19 pandemic has upended travel and consumer behavior.
The company earlier this week announced the latest expansion of its Uber Eats food-delivery business with an extension of grocery delivery across the U.S. under an agreement with supermarket chain
Freight is just a sliver of Uber’s overall business, providing $302 million in gross bookings of the company’s overall revenue of $19.5 billion in gross bookings in the three months ending March 31.
The company is seeking to bring greater efficiency through digital bookings to the domestic shipping sector but faces strong competition from traditional middlemen that match freight loads to available trucks and from a lineup of tech-focused startups including Convoy and Transfix Inc.
Uber last fall sold a $500 million stake in Uber Freight to investors in a funding round led by Greenbriar Equity Group LP and it withdrew from freight brokerage in Europe last year.
Uber Freight head
said in a statement the combination with Transplace would “bring together complementary best-in-class technology solutions and operational excellence…that will transform shippers’ entire supply chains, delivering operational resilience and reducing costs at a time when it matters most.”
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