XPO Logistics is Vetting Strategic Alternatives – Benjamin Gordon, Inbound Logistics
Summary
During its nearly ten-year existence, XPO has made myriad significant investments, with perhaps the two most high-profile ones coming in 2015, when it brought both Lyon, France-based 3PL Norbert Dentressangle SA into the fold for $3.53 billion to boost its European presence, and Con-way in September 2015 for $3 billion, which made it one of the top LTL providers in North America and also expand its global contract logistics, managed transportation and freight brokerage businesses. Our stock is well up more than ten times since we started XPO in 2011, and we added $2 billion in revenue and have grown $500 million in EBITDA since 2015 with no acquisitions whatsoever. But we are very excited about this process and the value that we think we can create from it.” Ben Gordon, Managing Partner of Cambridge Capital, an investor in niche supply chain leaders and also Managing Partner of BGSA Holdings, a leading mergers and acquisitions advisory firm focused on the transportation, logistics, and supply chain technology sectors, said Jacobs has had legendary success pursuing acquisition-led growth. It’s not surprising that some of the pieces proved to fit together better than others.” Gordon added that it is likely Jacobs looks at the fact that XPO trades at 9.3 times EBITDA and thinks the company is undervalued. While it could sell of its last mile operations for a solid multiple of around 10x EBITDA, it wouldn’t make sense with e-commerce 3PL market revenues growing at a compound annual growth rate of 18% according to our estimates.
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