XPO Logistics to puchase Con-way for $3 billion

by Truck News

ANN ARBOR, Mich. – XPO Logistics announced today that it has entered an agreement to acquire Con-way for $3 billion (USD).

According to reports, the transaction will position XPO as the second largest less-than-truckload provider in North America. XPO expects that the acquisition will help expand its global contract logistics platform and allow it to capitalize and benefit from Con-way’s truckload and freight brokerage business.

The board of directors of XPO and Con-way have unanimously approved the transaction and the deal is expected to close in October 2015.

The terms of the agreement outline that XPO will launch a tender offer for all of Con-way’s outstanding shares at $47.60 per share. Remaining outstanding shares of Con-way will receive the same consideration paid to stockholders who participated in the tender offer.

As well, all that XPO will acquire – Con-way Freight, Menlo Logistics, Con-way Truckload and Con-way Multimodal – will be rebranded and renamed as XPO Logistics.

Bradley Jacobs, chairman and chief executive of XPO Logistics, will retain these positions and lead the married company while Douglas Stotlar, Con-way president and CEO, will serve in a non-executive advisory capacity during the transition period.

“Our opportunistic acquisition of Con-way will make XPO the second largest provider of less-than-truckload transportation in North America, a $35 billion market,” said Jacobs. “LTL is a non-commoditized, high-value-add business that’s used by nearly all of our customers. Con-way is a premier platform that we will run with a fresh set of eyes as part of our broader offering. Importantly, we’ll gain strategic ownership of assets that will benefit our company and our customers during periods of tight capacity.

“Another crown jewel in this transaction is Con-way’s subsidiary, Menlo Logistics, an asset-light top 30 global contract logistics provider with additional lines of business in freight brokerage and managed transportation. Menlo serves blue chip contract logistics customers in verticals such as high tech, healthcare and retail, which complement the verticals we serve at XPO. The Con-way transaction will nearly double our pro-forma full year EBITDA to approximately $1.1 billion and increase our revenue to $15 billion upon closing. We’ll immediately begin executing our plan to improve the operating profit of the acquired operations by $170 million to $210 million over the next two years. We’ll raise our year-end 2015 target run rates for revenue and EBITDA, and issue new long-term targets, when we close.”

Stotlar also commented saying: “This landmark transaction provides immediate cash value for our shareholders and reflects the outstanding contributions of our employees over our 86-year history. The combination will mean more services for our customers, more miles for our drivers, and more career opportunities for our employees as part of XPO’s global organization. We look forward to working with the XPO team to complete the transaction and ensure a smooth transition.”

 


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  • Nice chunk of change for the “Wheels” at the top; doubt very much that it will trickle down to the real wheels out on the road.

  • It’s the logistics and brokerage companies that have driven rates into the ground and impacted trucking in a negative way. Large sums of money are exchanged at the top as the previous poster alluded to. Where the rubber meets the road is where the true hardship and highway robbery becomes tangible.