CCJ Daily Dispatch, July 10: Covenant sells factoring business to Triumph for $132M

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Updated Jul 13, 2020

Trucking news and briefs for Friday, July 10, 2020:

Covenant sells off factoring segment to Triumph Business Capital
Covenant Logistics Group (No. 35 on the CCJ Top 250) announced Wednesday it has sold its factoring arm, Transport Financial Solutions (TFS), to Triumph Business Capital for approximately $132.2 million, including contingent consideration of approximately $9.9 million.

“TFS has grown significantly since inception in late 2011 and delivered consistently strong margins and returns,” said Covenant Chairman and CEO David Parker. “With a critical mass of over $100 million of capital deployed and strong growth opportunities, it was time to transition the business to an owner with a core lending focus and deep knowledge of the transportation industry. We are confident Triumph is the right partner for TFS’ clients going forward.”

Parker added that the sale will allow Covenant to pay down over $120 million of debt in the near term.

The transaction was structured as a sale of TFS’ factoring assets, primarily consisting of $103.3 million of net accounts receivable and related factoring assets. Covenant received cash proceeds, net of transaction expenses, totaling approximately $107.5 million, plus Triumph stock valued at approximately $13.5 million, and the opportunity to earn contingent cash consideration of up to approximately $9 million after July 31, 2021.