Infrastructure investment manager I Squared Capital announced a transaction to combine the North American operations of two of its portfolio companies, with the recently rebranded Transportation Equipment Network (TEN) acquiring TIP Canada, the Canadian subsidiary of Europe-based TIP Group. The transaction is expected to close in Q2/24.

TIP Canada is a participant in the Canadian trailer leasing and rental market with a fleet of approximately 28,000 units. The company has more than 480 employees and more than 1,500 customers. TIP Canada also operates 12 workshop locations across Canada and 36 mobile service units providing maintenance services to its own customers as well as third parties.

According to I-Squared Capital with the acquisition of TIP Canda, TEN will be North America’s second largest full-service trailer lessor, with the company owning a combined fleet of more than 83,000 trailers. The combined group will provide services including integrated leasing, maintenance, advanced technological solutions, consultation services and fleet electrification offerings across multiple industry verticals.

I Squared Capital’s buildout of this trailer leasing platform began in March 2021 with the acquisition of Star Leasing and subsequent acquisitions of Cooling Concepts in May 2022, North East Trailer Services (NETS) in July 2023 and Commercial Trailer Leasing (CTL) in September 2023.

“This transaction is a win for our investors and our global transportation franchise,” Gautam Bhandari, chief investment officer and managing partner of I Squared Capital, said. “Leveraging I Squared’s expertise in platform building, the combination streamlines TEN and TIP’s operating footprints, improves purchasing power and clarifies strategic objectives. Trailers play a critical role in complex supply chain networks by meeting customers’ needs for operational and contractual flexibility. These are two leaders in their respective markets and combined they represent a very attractive prospect for infrastructure investors.”

“While continuing to service the individual customer base, we see a great opportunity to service both Canadian customers that do business in the U.S., as well as U.S. customers that do business in Canada, providing them with value added solutions to help them run their businesses more efficiently,” Scott Nelson, president of TEN, said. “Our expanded scope will allow greater access to equipment and expanded relationships with our supplier partners.”

“For TIP, this will mean a renewed focus on Europe, our home market,” Bob Fast, CEO of TIP Group said. “We greatly anticipate prospects for diversification and electrification of our fleet, alongside the expansion of our maintenance network to continue to serve our valued customers and align with our vision to be a leading equipment service provider.”

I Squared Capital acquired TIP Group in August 2018 and has tripled its EBITDA since then via a combination of organic growth and bolt-on acquisitions.