Uber recently made a significant acquisition. It has bought a business known as Transplace in a deal worth $2.25 billion in a cash-only deal. The company is now growing.
The company has been systematically working to clean up its balance sheet in the past two years.
Uber is dissolving divisions that require a lot of resources and were a pain to the company's cash flow. It achieved this by directly paying other parties to pull the assets from its balance sheet in exchange for some percentage equity ownership.
The process is largely completed, and the company focuses on building its existing business - Transplace is the latest acquisition. Transplace acquisition will be incorporated into the company's division that the majority of people haven't heard about - Uber Freight.
Uber Freight is precisely what it is - it is a transportation facilitation logistics source. The company used the same software for marketplaces it created for ride-sharing and then used it for logistics and trucking. It connects carriers (drivers) with cargo load that must be moved between points A and B.
This is the reason why the Transplace acquisition is logical. Transplace offers a platform for logistics cross-border services. It aids companies that need to transport freight from one place to another. This brokering service for trucks links businesses with independent truck drivers capable of transporting cargo loads throughout North America.
Transplace has housing currently around 62,000 customers on its platform. The platform manages 530 million transactions every year. This means that Uber Freight can contribute approximately $16 billion in "Freight Under Management" (FUM) to Uber Freight, a fantastic addition to its existing business.
This acquisition adds a sizable increase to the company freight business. This acquisition is proof that the company is finally turning the corner in its more significant future objective.
The company will experience an impressive increase in gross margins entering 2022. I'm convinced that Uber will go from being in red $1 billion to a green pasture of $1 billion free cash flow by next year.
"We are Uber. The go-getters. The kind of people who are relentless about our mission to help people go anywhere and get anything. Movement is what we do. It's our lifeblood. It runs through our veins. It's what gets us out of bed each morning. It pushes us to constantly reimagine how we can move better. For you. For all the places you want to go. For all the things you want to get. For all the ways you want to earn. Across the entire world. In real-time. At the incredible speed of now".
This is a massive leap for Uber. It's likely to put the company's stock up during the coming year - This company should be on your financial radar screen.
This article was printed from TradingSig.com