Uber to Snap up Transplace for $2.25B; Street Says Buy

American technology company Uber Technologies, Inc. (UBER) announced that it has entered into a definitive agreement to acquire logistics company Transplace, through its subsidiary Uber Freight, for $2.25 billion from TPG Capital. Uber Freight is the logistics arm of Uber.

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Following the news release, shares of the company rose marginally to close at $47.59 in the extended trading session.

Uber Freight will carry out this transaction through a cash and stock deal, comprising up to $750 million in Uber’s stock and the remainder in cash.

The buyout is expected to give a strong footing to Uber in the logistics space and enable it to serve its customers more efficiently with enhanced offerings. Further, the acquisition is expected to help Uber Freight break even on an adjusted EBITDA basis by the end of 2022.

The Head of Uber Freight, Lior Ron, said, “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.” (See Uber stock chart on TipRanks)

Three days ago, Bank of America Securities analyst Justin Post reiterated a Buy rating on the stock with a price target of $71. The analyst’s price target implies upside potential of 49.3% from current levels.

Consensus among analysts is a Strong Buy based on 22 Buys and 4 Holds. The average Uber price target of $72.71 implies upside potential of 52.9% from current levels. Shares have gained 47.9% over the past year.