XPO Adds to Deal Haul With Trucker Con-way
The purchase extends the string of transactions that have helped XPO become a powerhouse in the global logistics market
XPO Logistics Inc., the acquisitive supply- chain services company, agreed to buy trucker Con-way Inc. in an all-cash deal valued at $3 billion.
The purchase extends the string of transactions that have helped XPO become a powerhouse in the global logistics market under Chief Executive Officer Brad Jacobs since 2011, when his private-equity fund invested $135 million in the company. Under Jacobs, XPO has completed at least 14 mergers and boosted its revenue almost 40-fold to a projected $6.7 billion this year. The company’s deal history includes the purcahses of Pacer International Inc. and Landstar System Inc.
XPO’s offer for Con-way is $47.60 a share, according to a statement Wednesday, about 32 percent more than Con-way’s closing price Tuesday of $36.18. The transaction value includes about $290 million of net debt, the statement shows.
Con-way specializes in less-than-truckload shipping, putting goods from multiple customers in each trailer, and XPO said the deal would create the second-largest LTL operator in North America. Ann Arbor, Michigan-based Con-way had a market value on Tuesday of about $2.1 billion, compared with about $3.3 billion for Greenwich, Connecticut-based XPO.
“This transaction was about how do we offer something to customers that’s different than anyone else,” Jacobs said Wednesday by phone. “This completes our package to them. This makes us more valuable to our customers.”
In an interview with Bloomberg in April, Jacobs said XPO was in the “early innings” of its growth plan after completing a $3.53 billion deal for French freight group Norbert Dentressangle SA.
“We want to take this network we have built with now $15 billion of revenue, between this deal and the Norbert one, and take out the costs and the overlap and find the savings that we know are there,” Jacobs said Wednesday.
The Con-way acquisition should close in October, according to XPO, which said it would raise its year-end 2015 financial forecasts and “and issue new long-term targets upon completion of the acquisition.”