Does 5i feel like TFII did a good job of integrating the previous acquisition and therefore do we have confidence in there ability to integrate this larger one?
I'm concerned about the premium paid here and how much Goodwill is included and if we feel like TFII did a good job of closing the gap on the Goodwill of their previous acquisitions?
Thanks!
Historically, TFII has been an astute acquirer. In 2021, they acquired UPS Ground Freight for $800 mln so they are not strangers to larger acquisitions. Back in 2014 they acquired Contrans which was a fairly large purchase for them at the time as well and it worked out very well. We would have some degree of confidence that TFII will make this deal work. Markets seem to like the deal, sending shares up nearly 8% after the announcement, so that is a good first sign. The purchase does have a big premium but we doubt they would have done the deal if they felt like there wasn't additional upside from that price and this is confirmed by their EPS accretion expectation in 2025. Zooming out a bit on Daseke, the purchase price is still below past highs for the company.