Item 1.01. Entry into a Material Definitive Agreement.
On August 21, 2022, Heartland Express, Inc., a Nevada corporation (the “Company”), and Heartland Express, Inc. of Iowa, an Iowa corporation (the “Buyer”), entered into a Stock Purchase Agreement (the “Agreement”) with TForce US Holdco, Inc., a Delaware corporation (“Seller Parent”), and TForce TL Holdings USA, Inc., a Delaware corporation (the “Seller”), to acquire Transportation Resources, Inc., a Missouri corporation (“TRI”) (such acquisition the “Transaction”). Seller Parent and Seller are subsidiaries of TFI International, Inc. (“TFI”). TRI operates as Contract Freighters, Inc. (“CFI”) and the Transaction includes all of TFI’s non-dedicated U.S. dry van and temperature-controlled truckload business, in addition to its CFI Logistica operations in Mexico. The term CFI does not include the CFI Dedicated or CFI Logistics U.S. brokerage operations, which are not part of the Transaction.
Pursuant to the Agreement, at closing, the Buyer will acquire all of the equity of TRI for an enterprise value of approximately $525 million in cash, subject to certain customary adjustments specified in the Agreement, including for working capital, cash, indebtedness, transaction expenses, and a claims reserve amount.
The Transaction is expected to close in the third quarter of 2022, subject to the satisfaction of closing conditions, including (i) the accuracy of the applicable counterparty’s representations and warranties in the Agreement, subject to certain exceptions and materiality thresholds, (ii) the applicable counterparty’s performance or compliance in all material respects with the covenants contained in the Agreement, (iii) each counterparty being ready to deliver specified closing deliveries, (iv) the absence of a Material Adverse Effect (as defined in the Agreement), (v) the satisfaction of all regulatory requirements, (vi) the absence of certain legal matters prohibiting the Transaction, and (vii) certain conditions regarding the financing of the Transaction.
The Agreement contains customary representations, warranties, and covenants by each party that are subject, in some cases, to specified exceptions and qualifications contained in the Agreement. The Agreement also includes customary indemnification provisions, including with respect to breaches of representations, warranties, and covenants and, in the case of Seller and Seller Parent, certain taxes incurred prior to closing and any cash, current assets or liabilities, indebtedness, transactions expenses, or claims reserve amount not taken into account in the calculation of the final purchase price.
The Agreement contains termination rights for the Buyer and the Seller, including if the Transaction is not consummated within 60 days after the date of the Agreement, which may be extended under the terms of the Agreement.
The foregoing description of the Agreement and the Transaction does not purport to be complete and is qualified in its entirety by reference to the Agreement, a copy of which will be filed with the Company’s periodic report for the applicable period.