BMO’s transportation group, huge lender to trucking, is being sold

The transportation lending business of Canada’s BMO is being sold to a private equity company with the bank retaining a minority stake.

Stonepeak, which already is heavily involved in logistics through, among other assets, its ownership of chassis provider Trac Intermodal, said Monday it was acquiring the unit, along with BMO’s vendor finance business.

The sale will bring an end to BMO’s (NYSE: BMO) majority ownership of the group, which it acquired from GE Capital in 2015. The possibility of it being sold was first reported by Bloomberg last year. 

BMO’s transportation sector is believed to be one of the largest lenders in the trucking business.

It will also bring an end to a frequent feature of various trucking conferences: BMO paying what it took to snag that first spot in the exhibition hall as delegates walked into the large room. The BMO booth at the head of the queue was a frequent sight.

In a possible foreshadowing of what was to come, BMO took a booth at the Truckload Carriers Association meeting in March, but it wasn’t in its usual prized location.

A new name for the group has not been chosen. And while the group under Stonepeak might take that primary spot in the future, it won’t be under the BMO name.

According to a prepared statement released by both BMO and Stonepeak, BMO will retain a 19.9% share in the business being sold to Stonepeak. The sales price was not disclosed.

The management team at BMO’s transportation group will be remaining in their positions after the sale.

The head of the group at BMO, Gary Kempsinski, said in the statement that “we could not have envisioned a better partner to lead BMO Transportation and Vendor Finance into its next chapter.”

“Stonepeak brings deep experience, operating expertise, and relationships in North American transportation and logistics infrastructure, and particularly in asset leasing businesses,” he said.

No more credit data

The sale will also end the industry being provided four times a year with a highly transparent look at credit conditions in the trucking sector through BMO’s quarterly earnings statement.

Supplemental information provided each quarter by BMO broke out such measurements as writeoffs, impaired loans, provisions and allowances for all of their sectors, transportation included. Given that the transportation segment was believed to be at least 90% trucking-focused, that data gave a clear picture of the strength or weakness of trucking credit markets.

The data showed when conditions were very good. It showed when the trucking market was most definitely not good. It showed recently when things were starting to improve.

That data was available because BMO is a publicly-traded company. But it would not be expected to release that data as just a minority shareholder in the business.

The sale is expected to close in the fourth quarter, according to the companies. It is possible that the individual sector data will be released in BMO’s next two quarterly earnings statements, May 27 and sometime in late August.

BMO reported a book of business in transportation of CA$12.42 billion at the close of the first quarter of fiscal 2026, which ended January 31. The size of the book of business peaked at $15.62 billion in the fourth quarter of 2023.

While a sales price for the units was not disclosed, the companies said the combined book of business for the two units was about $14.5 billion as of March 31.

Selling near the bottom?

The timing of the sale did raise eyebrows for some observers. If it is assumed the sales process began around the time of the Bloomberg story, that was occurring when the freight market was near the bottom of its years-long slump.

The sale, by contrast, is coming at a time when freight markets by all accounts are rapidly strengthening.

But BMO will be able to participate in the turnaround through its almost 20% stake. And BMO said in its statement that the small stake would enable it to “benefit from ongoing income participation with significantly lower capital.”

Banking sources said the capital needs of an independent lender like Stonepeak, as opposed to  a more tightly regulated bank, could be seen as favoring the less encumbered private ownership.

Stonepeak has $88 billion of assets  under management. It declined comment beyond its prepared statement that was issued jointly with BMO.

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