Canadian trucking and logistics company TFI International said it will move its headquarters to the U.S., earning criticism from one of its largest shareholders.
Montreal-based TFI said it decided to change its legal domicile to the U.S. because about 70% of its operations are based there.
The announcement annoyed the C$452 billion ($316 billion) Caisse de Depot et Placement du Quebec, Montreal, a pension fund manager that has long fought to prevent companies from leaving the French-speaking province.
CDPQ owned a stake of more than 4% in TFI as of Dec. 31, according to data compiled by Bloomberg. Canada’s second-largest public pension fund manager has a dual mandate: to generate returns and to contribute to Quebec’s economic development.
“The company has not informed us of its intentions, and we will express our dissatisfaction,” CDPQ spokesperson Kate Monfette said in an emailed statement. “Quebec’s interests are always at the heart of our priorities as a shareholder.”
But TFI CEO Alain Bedard pushed back, saying the legal change won’t alter the company’s operations and that it stems in part from regulatory requirements related to its New York Stock Exchange listing. “It’s business as usual,” he said on a conference call with analysts.
“We’re not moving people from Canada to the US. We’re not doing that. We’re not stupid,” he added.
The change in domicile, if approved by shareholders, should be completed within the next year.
TFI is the fourth-largest for-hire carrier in North America and the fifth-largest less-than-truckload carrier, according to Transport Topics and Bloomberg Intelligence, respectively.
TFI reported revenue of $2.1 billion and adjusted earnings per share of $1.19 for the fourth quarter, missing analyst estimates compiled by Bloomberg.
“We are still in a very deep freight recession,” Bedard said, adding that 2025 will be “very difficult.” The company is also facing some cost issues.
Nonetheless, Bedard said he thinks TFI could be well-positioned to do acquisitions. “With all this insecurity, if you’re bold, maybe it’s the right time to do a deal,” he said. “If you wait for things to get better, you will pay more.”
TFI’s stock has soared by about 225% in Canadian-dollar terms over the past five years as the company pursued an acquisition spree. Last year, it purchased Texas-based Daseke for an enterprise value of $1.1 billion, and TFI has bought 137 companies in the U.S., Canada and Mexico since 2008, according to its website.
“We do not believe any tax savings brought about by the U.S. redomiciliation announcement will be enough to please investors,” Desjardins Securities analyst Benoit Poirier wrote in a note to clients.
