XPO Logistics increases size of shares for IPO

By Jeff Berman, Group News Editor
March 15, 2012 - LM Editorial

Non asset-based 3PL XPO Logistics said today that it has increased the number of shares for its underwritten public offering from 6,000,000 earlier this week to 8,000,000 to the public at $15.75 per share.

Company officials said the underwriters have a 30-day option to purchase up to an additional 1,200,000 shares of common stock from XPO to cover over-allotments. And they added that XPO “intends to use the net proceeds of the offering for general corporate purchases, which may include potential acquisitions.” This offering, said XPO, is expected to close on March 20 and is subject to customary closing conditions.

In February, XPO released its fourth quarter earnings results. Total revenue for the fourth quarter was $44.1 million, with a gross margin of $7.2 million, which were up 6.1 percent and 11.6 percent, respectively. XPO had a quarterly net loss of $1.5 million and an EBITDA loss of $2.1 million, which included $1.2 million in compensation and professional fees related to the hiring of its new executive team and $882,000 of non-cash-share-based compensation.

For its individual units, total revenue at Express-1, its expedited transportation division, was up 10.1 percent at $20.3 million; Concert Group Logistics (CGL), its freight forwarding unit, was down 4.9 percent at $16.8 million, which XPO said was due to lost revenue from larger accounts that more than offset an increase in the number of new customers; and Bounce, its truck brokerage business, was up 27.2 percent at $8.3 million.

In June 2011, XPO CEO and Chairman Bradley S. Jacobs, whom is also an entrepreneur and founder and owner of Jacobs Private Equity LLC,  and a and a group of investors made a $150 million commitment into Express-1 Expedited Solutions, a non-asset-based third party logistics transportation provider, and subsequently re-named the company XPO Logistics.  Around that time, he told LM that he had outlined a detailed vision for XPO and where he wants to take it and the steps he wants to take to make it happen.

These steps include, first and foremost, building a multi-billion dollar transportation brokerage business in the coming years, growing organically and through acquisitions, building a comprehensive IT structure, and getting the right management team in place.

And after the fourth quarter earnings announcement Jacobs said in an interview that XPO is on a solid growth track, opening new offices in various U.S. markets, hiring a proven management and sales team, and getting phase one of its IT development done.

What’s more, he explained that XPO is on track to get to a revenue run rate of about $500 million by the end of this year, which is about 2.5 times of its current size.

With this IPO announcement possibly including some financing for potential acquisition, Jacobs told LM that while XPO is not quite yet ready to announce any transactions he did say the company is in active negotiations with a number of targets.

“Regarding the deals we are focusing on now, they are primarily truck brokerage and they are all highly scalable,” he said. “Scalability is a major characteristic that we are looking to acquire. The [acquisition] pipeline is quite robust, and we are quite excited about the opportunities.”



About the Author

Jeff Berman headshot
Jeff Berman
Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Company says the Cloud offering allows customers to respond more quickly to new business opportunities, without significant upfront cost and implementation times.

As e-commerce continues to take a bigger piece of the holiday package delivery pie, it stands to reason that companies need to be proactive and prepared in order to deliver premium service during the busiest time of year, which is rapidly approaching. And that is exactly what transportation giants UPS and FedEx are doing this year. How are they doing it exactly? The primary step they are taking is to up their numbers of seasonal staffers.

A recent hearing of the Subcommittee on Coast Guard and Maritime Transportation suggests that the U.S. Merchant Marine industry may be poised for a major comeback.

Spot market freight volumes for the month of August remained elevated compared to seasonal norms, according to data issued this week Portland, Oregon-based freight marketplace platform and information provider DAT.

Factors such as rising freight rates, shrinking capacity, an increased desire for global supply chain visibility, have all worked together to drive the need for instituting a culture of continuous improvement in logistics operations and transportation management systems (TMS). To meet today's complex logistics challenges, managers are stepping into a more streamlined, automated approach to transportation management in order to function at optimal levels both domestically and internationally. Read the latest special report.

Article Topics

News · 3PL · Logistics · XPO Logistics · All topics

About the Author

Jeff Berman, News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman.

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA