Uber Freight, the rideshare business' trucking unit, announced that it is acquiring shipping software company Transplace in a deal valued at US$2.25 billion.

Uber Freight will acquire Transplace from TPG Capital, the private equity platform of alternative asset firm TPG that acquired Transplace in 2017. The deal consists of up to US$750 million in common stock of Uber Freight’s parent company, Uber Technologies, Inc., and the remainder in cash. 

Transplace said in its announcement that Uber Freight’s acquisition will create one of the leading logistics technology platforms, with one of the largest and most comprehensive managed transportation and logistics networks in the world.

The transaction is subject to regulatory approval and other customary closing conditions.

"The acquisition comes at a time of accelerated transformation in logistics.

The demands of a volatile market and the increasing complexity of globalized logistics are clashing with industrial-age transportation technology," Transplace said, noting that in the midst of capacity constraints and escalating transportation costs, shippers are adapting their operations at an increasing pace and looking for technology, support, and solutions that can modernize their supply chain and keep critical goods, and the economy, moving.

“This is a significant step forward, not just for Uber Freight but for the entire logistics ecosystem,” said Lior Ron, head of Uber Freight.

“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,” he added.

For his part, Frank McGuigan, CEO of Transplace, noted that the acquisition will combine the world’s premier shipper network platform with one of the industry’s most innovative supply platforms.”

“Our expectation is that shippers will see greater efficiency and transparency and carriers will benefit from the scale to drive improved operating ratios,” McGuigan said.

“All in all, we expect to significantly reduce shipper and carrier empty miles to the benefit of highway and road infrastructures and the environment.”

“Fully-scaled logistics platform”

Under TPG, Transplace noted that it invested heavily in technology as part of TPG’s digitization of the global supply chain and the rapid adoption of logistics technology and solutions.

“Uber Freight’s vast network of digitally-enabled carriers, combined with Transplace’s trusted shipper technology and operational solutions, will result in a fully-scaled logistics platform built to meet both shippers and carriers,” Transplace said in its statement.

Uber Freight chief Lior Ron said the deal is a continuation of the company’s long-term vision, which is to bring digital transformation to the industry.