XPO Logistics is set to acquire Kuehne + Nagel’s United Kingdom-based contract logistics operations

Greenwich, Conn.-based XPO Logistics, a provider of global freight transportation and logistics services, said today that it has entered into a definitive agreement to acquire the majority of Kuehne + Nagel’s United Kingdom-based contract logistics operations.

Financial terms were not disclosed.

XPO officials said that Kuehne + Nagel’s U.K. contract logistics operations include various services, including: inbound and outbound distribution; reverse logistics management, and inventory management. For 2019, Kuehne + Nagel’s U.K. contract logistics operations took in around $500 million (EUR) from the beverage, technology and e-commerce, and food service verticals.

And XPO also noted that this acquisition will expand XPO’s contract logistics offering in the UK with complementary expertise, 75 facilities and a blue-chip customer base, with XPO integrating the acquired operations on its technology platform to optimize synergies within its pan-European network.

The transaction is expected to close in the second half of 2020, subject to customary conditions and regulatory approvals, according to XPO.

Last month, XPO reported strong fourth quarter and full-year 2019 earnings.

Fourth quarter revenue—at $4.14 billion—was off 6% annually, but net income attributable to common shareholders—at $96 million—was up 14%. Adjusted EBITDA for the quarter headed up to $432 million, for a 14% increase, and XPO generated cash flow from operations, of $349 million, for a 38% annual decline, as well as $349 million of cash flow from operations and $221 million of free cash flow, which was down 54%. Adjusted earnings per share—at $1.12—were up 56% annually and topped Wall Street expectations of $1.08.

Full-year 2019 revenue was off 3.7% to $16.65 billion, and organic revenue growth saw a 9.3% annual gain, with earnings per share, at $3.47, ahead of 2018’s $2.88. Adjusted EBITDA for 2019, at $1.67 billion, was up 7%.

In January, XPO made an announcement regarding the sale, or spin-off, of some of its business units, with the exception of its North American LTL unit.

“This process is consistent with our long-held priority of maximizing shareholder value,” said XPO Chairman and CEO Brad Jacobs on the company’s earnings call. “We are proud of the outsized returns we have already delivered for our shareholders, and we continue to trade at a significant discount, to the sum of our parts…to the valuation of our pure play peers. The process is off to an excellent start.