(Bloomberg) — United Parcel Service Inc. agreed to promote its short-haul trucking enterprise for $800 million, the primary substantial transfer within the “better-not-bigger” technique that Carol Tome developed since taking up as chief govt officer in June.Canada’s TFI Worldwide Inc. will purchase the unit, one of many largest less-than-truckload carriers within the U.S., UPS mentioned in a press release Monday. The eight-decades-old operation, separate from the bundle deliveries for which UPS is thought, is primarily a business-to-business enterprise hauling giant industrial cargo in massive vans.Tome’s plan to get lean is a change from 2005, when UPS paid about $1.25 billion for the trucking unit in an effort to develop into a one-stop store for transportation providers. She has pledged to extend return on capital funding by specializing in the core parcel enterprise, model and tradition whereas sustaining UPS’s dividend and investment-grade credit standing. All the pieces else is beneath overview, Tome mentioned in July.TFI expects the acquisition will add to earnings this yr and can improve revenue as the corporate improves effectivity. “That is essentially the most strategic acquisition that TFI has ever carried out,” CEO Alain Bedard mentioned on a convention name with analysts.Its inventory surged 24% to C$80.74 at 11:49 a.m. in Toronto after climbing 30%, essentially the most intraday since December 1999. TFI had superior 45% within the 12 months by way of Jan. 22, whereas the S&P/TSX benchmark index gained 1.4%. UPS rose 1.5% to $161.40 in New York on Monday.Core BusinessMonday’s “settlement permits UPS to be much more laser-focused on the core components of our enterprise that drive the best worth for our clients,” Tome mentioned within the assertion. The Atlanta-based firm will take a $500 million cost associated to the sale, which is anticipated to shut within the second quarter.The unit had gross sales of about $3.1 billion and 14,500 employees final yr, based on a UPS presentation. It operated 6,340 tractors and 23,400 trailers in 197 amenities.The enterprise, whose clients embody Greatest Purchase Co., Honda Motor Co. and Dwelling Depot Inc., has a “roughly break-even” working margin, based on TFI. The unit moved cargo at under market charges and was a loss chief for UPS so the courier might provide a bundle of providers to clients, Bedard mentioned. He intends to extend costs whereas retaining clients.Bedard plans to cut back prices by buying new automobiles which can be extra environment friendly and by streamlining cross-border freight between the U.S. and Canada, amongst different issues. The St Laurent, Quebec, firm, which had a market worth of C$7.54 billion ($5.91 billion) from Monday’s inventory surge, expects to extend gross sales in Mexico as effectively.“This opens plenty of alternative for us,” mentioned Bedard, whose firm has made greater than 90 acquisitions since 2008. The unit will proceed to supply service to UPS beneath a five-year settlement.The sale received’t have an effect on UPS’s package-delivery enterprise’s operations and can increase the corporate’s working margin by 0.2 share level, the courier mentioned.(Updates with TFI chief govt’s remark in fourth paragraph)For extra articles like this, please go to us at bloomberg.comSubscribe now to remain forward with essentially the most trusted enterprise information supply.©2021 Bloomberg L.P.