I Squared Capital announced a transaction to combine the North American operations of two of its portfolio companies.

The recently rebranded Transportation Equipment Network, "TEN" (f.k.a. Star Leasing), will acquire TIP Canada, the Canadian subsidiary of Europe-based TIP Group.

TIP Canada is the Canadian subsidiary of TIP Group, a leading player in the Canadian trailer leasing and rental market with a fleet of approximately 28,000 units. The company has over 480 employees and over 1,500 customers with diversified end sector exposure. TIP Canada also operates 12 workshop locations across Canada and 36 mobile service units providing coast-to-coast maintenance services to its own customers as well as third parties.

With the acquisition of TIP Canda, TEN will be North America's second largest full-service trailer lessors with a combined fleet of over 83,000 trailers with locations across most major logistics hubs.

Equipped with decades of knowledge and experience, incredible customer track records, and a sharp perspective on the future of the industry, the combined group will provide services including integrated leasing, maintenance, advanced technological solutions, consultation services and innovative fleet electrification offerings across numerous industry verticals.

I Squared'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. TEN has now more than quadrupled in size thanks to strong organic growth and this series of tuck-in acquisitions.

Gautam Bhandari, Chief Investment Officer and Managing Partner, I Squared, said: "This transaction is a win for our investors and our global transportation franchise. 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."

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

Bob Fast, CEO of TIP Group said: "For TIP, this will mean a renewed focus on Europe, our home market. 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 acquired TIP Group in August 2018, and has tripled its EBITDA in that time via a combination of organic growth and bolt-on acquisitions. Headquartered in Amsterdam, TIP operates across 17 European countries plus Canada. This transaction will streamline TIP Group's portfolio, allowing the company to focus on its core European operation and freeing up capital to capture further growth opportunities in the home market.

The transaction is expected to close in the second quarter of 2024.