Transfix is set to become a public company through transaction with G Squared

Last week, New York-based Transfix, a logistics technology services provider that streamlines shipment data to better help shippers make informed decisions to optimize time and revenues, announced it became a publicly traded company.

The company said that this was done by entering into a definitive business combination agreement with G Squared Ascend I Inc., a special purpose acquisition company (SPAC) sponsored by affiliates of G Squared, a growth-stage venture capital fund manager with a technology sector focus. This expected is expected to close in the first quarter of 2022, with the combined company to be listed on the New York Stock Exchange under “TF.”

Transfix officials said that this transaction implies a pro forma enterprise value of $1.1 billion for Transfix. And the company said that: “The ability to leverage its public equity for recruiting, M&A, and other strategic endeavors provides Transfix the opportunity to generate value for our shareholders and accelerate growth.”

Transfix CEO and President Lily Shen and Transfix Co-Founder & Chairman of the Board Drew McElroy will remain in their current roles, as well as the other members of the company’s executive team.

“We are thrilled to be partnering with G Squared on this significant milestone,” said Shen in a statement. “They have been incredible partners who share our excitement about the opportunity ahead, and who bring invaluable expertise in and knowledge of our rapidly growing sector. With this transaction, Transfix is well-positioned to accelerate growth and innovation to drive our impact at scale. We are at the beginning of a new era for the freight industry.”

In an interview, McElroy told LM that having spent the last eight years building its platform and developing relationships with shippers and carriers, Transfix is now at a point in its maturity where the company feels it is appropriate to increase the velocity of its growth.

“This transaction gives us the capital and the public market equity to significantly increase investment and growth of both the core truckload marketplace, as well as our new product offerings of TMS (transportation management system), FMS (fleet management software), LTL (less-than-truckload) and other yet unannounced products,” he said.

As for what the main benefits of going public are for Transfix customers, McElroy noted that Transfix expects this transaction to allow its business to continue to grow at a significant rate into thew future, which can, in turn, help every Transfix partner, whether they be a shipper or a carrier/driver.  

“At the heart of our business thesis is the idea that value is created by eliminating and monetizing waste (empty miles and dwell time) and then sharing that incremental value creation with our shipper and carrier partners,” he said.

When asked what this transaction means for Transfix, in terms of competitive benefits and advantages, McElroy explained that it represents the opportunity to simultaneously add significant capital to its balance sheet and also gain access to public market equity.

“We expect this will allow us to significantly increase our investments in the business, as well as our strategic optionality as we move forward,” he said. “We expect it will also allow us to be aggressive in the future with regard to both M&A and modal, as well as geographic expansion. “Additionally, G Squared is an excellent strategic partner to add to our team, with significant investment in world-class tech companies (Airbnb, Spotify, Coursera), as well as deep expertise in freight tech. They make an excellent long-term partner as we expand our business over time.”