TFI International (TFII) is a North American leader in the transportation and logistics industry. It operates across Canada, the United States, and Mexico, notes Gordon Pape, Canadian stock expert and editor of Internet Wealth Builder.

The firm offers package and courier service, truckload and less than truckload haulage, logistics, and other services.

TFI recently announced the acquisition of the dry bulk business of Grammer Logistics. Originally established as part of Sterling Transport in the early 1990s, Grammer Logistics focuses on the transportation of commodities including cement and cementitious materials, sand, fly ash, salt, and lime.

The company services the southeast U.S. from Maryland through Virginia, North Carolina, South Carolina, Georgia, and  into Florida.

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It has about 100 company drivers and owner operators, who manage a fleet of over 90 leased and owned tractors and more than 150 company-owned tank trailers.

The business generates approximately US$12 million in annualized revenues and will become part of TFI International’s BTC East operating company within its Truckload segment.

Earlier, the company announced it had purchased DLS Worldwide, a business unit of R.R. Donnelley & Sons for US$225 million. Established in 2006 and based in Illinois, DLS provides logistics services through a network of internal sales personnel, commissioned sales agents, and approximately 140 agent-stations.

The acquisition is expected to close shortly. Over a recent 12-month period, DLS generated approximately US$550 million in revenue, including intercompany sales that are expected to continue after closing.

TFI expects the acquired operations to generate approximately US$22.5 million in operating income during the first four full quarters after closing, before potential synergies and non-cash amortization of intangible assets and related purchase accounting adjustments.

Third-quarter revenue was down slightly from last year but operating income from continuing operations increased to $156 million from $131.9 million last year.

Adjusted net income was $115.8 million ($1.25 per share), up from $88.1 million ($1.04 per share) in the same period of 2019. The stock pays a quarterly dividend of $0.26 a share ($1.04 a year) to yield 1.8%. I rate the stock a "buy".

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