UPDATE 3-Canadian logistics firm TFI International to buy Daseke in $1.1 bln deal

(Adds analyst comment in paragraph 7, updates shares)

Dec 22 (Reuters) - Canadian logistics company TFI International said on Friday it would buy Daseke , an operator of flatbed and specialized trailers, in a $1.1 billion deal, including debt, to scale up its truckload business.

TFI agreed to pay $8.30 in cash for each share of Daseke, representing a premium of 69% on Daseke's closing price on Dec. 21.

The combined company's truckload segment is expected to generate about $3.6 billion in annual total revenue on a proforma basis and would become one of the largest truckload businesses in Canada, TFI said.

The deal, which is valued at about $386 million on an equity basis, comes at a time when freight demand remains suppressed due to a sharp decline in online purchases from their pandemic-driven peaks.

TFI said while its immediate focus would be on improving Daseke's financial results, it also, in the medium term, plans to explore the benefits of separating the combined entity into two listed companies.

This would include the one focused on the truckload business and the other comprising the package and courier, less-than-truckload, and logistics segments, TFI said.

"We expect TFI to drive long-term value for shareholders with both their acquisition of flatbed carrier DSKE in 2Q24 and the potential spinoff of their combined truckload businesses in 2025/26," Susquehanna analyst Bascome Majors wrote in a note.

U.S.-listed shares of TFI were up 7.7% in afternoon trading, while Daseke shares jumped 65% to $8.10.

The transaction is expected to close during the second quarter of 2024, Daseke said - a company specialising in heavy haul transportation in North America with a fleet of more than 4,500 tractors and 10,500 flatbeds.

"Daseke's deep expertise in servicing a broad portfolio of specialized and industrial end markets such as high-security cargo, agriculture, manufacturing, and construction, is critical given the relative strength of specialized market dynamics today," TFI CEO Alain Bédard said.

TFI said it expects to fund the transaction using cash balances and available financing sources.

J.P. Morgan Securities served as financial advisor to Daseke. (Reporting by Abhinav Parmar in Bengaluru; Editing by Anil D'Silva, Shweta Agarwal and Krishna Chandra Eluri)