TPG acquisition may take Transplace beyond North America, executive says

The sale of third party logistics provider (3PL) Transplace to private equity behemoth TPG Capital could position Transplace to expand its network beyond North America, Transplace president and COO Frank McGuigan said today.

McGuigan said although the Frisco, Texas-based company has enough opportunities on the continent to cover at least the next five years, it has discussed the possibility of expanding globally because its customers continue to inquire about it. Transplace serves the U.S., Canada, and Mexico, with an especially strong presence in Mexico.

Yesterday, TPG Capital, the private equity unit of TPG, said it would acquire Transplace from Greenbriar Capital LLC, a private equity firm that acquired Transplace in 2013. The transaction is expected to close around Sept. 30.

As is commonplace in the private equity world, Greenbriar planned to hold Transplace for a set number of years and sell once Transplace hit its financial targets. Transplace has grown its net revenue—revenue after the cost of purchased transportation is factored in—by 150 percent during Greenbriar's four-year tenure, McGuigan said in a phone interview. Transplace generates about $1.8 billion in annual gross revenue.

Terms of the TPG acquisition were not disclosed. Benjamin Gordon, who runs BG Strategic Advisors, a logistics mergers and acquisitions firm, pegs the sale in the vicinity of $1 billion. McGuigan declined to comment. Gordon declined to comment on how much Greenbriar paid for Transplace, but said it will realize a handsome return on its investment. TPG declined comment beyond the press release announcing the deal.

With $73 billion in assets and locations throughout the world, TPG dwarfs most private equity firms, including Greenbriar. TPG also owns Llamasoft Inc., an Ann Arbor, Mich.-based developer of supply chain design software. TPG acquired Llamasoft in May. Transplace and Llamasoft have collaborated for years, McGuigan said. Transplace and Llamasoft will operate separately under the TPG umbrella.

In an e-mail, Gordon said that the TPG-Transplace deal underscores that public and private capital alike remain "very interested in top-tier logistics companies." Gordon said there is an abundance of high-quality logistics firms still in the market.

Transplace made four acquisitions during Greenbriar's tenure, and the company said it expects to make selective acquisitions under TPG ownership.