XPO announces new spin-off transaction
XPO Logistics, Inc. intends to separate its tech-enabled brokered transportation services from its less-than-truckload (LTL) business in North America; and intends to divest its European business and North American intermodal operation.
The planned spin-off transaction is intended to be tax-free to XPO shareholders and would create two focused, publicly traded companies at the top of their industries:
- The spin-off would be a leading platform for tech-enabled truck brokerage services in North America, with a long track record of industry-best revenue and margin growth, a highly efficient digital freight marketplace and access to vast truckload capacity, with complementary, asset-light offerings for last mile logistics, managed transportation and global forwarding. The corporate headquarters are expected to be in Charlotte, North Carolina.
- Upon completion of the spin-off, XPO’s North American LTL segment would be a pure-play LTL industry leader — the third largest provider of domestic and cross-border LTL freight shipping, with a competitively advantaged network of transportation assets managed by proprietary technology. The standalone business would have a singular focus on enhancing the growth and profitability of its national network for the benefit of its stakeholders. The corporate headquarters are expected to be in Greenwich, Connecticut.
The company plans to divest its European business through either a sale or a listing on a European stock exchange. In North America, the company is currently under an exclusivity agreement in connection with a potential sale of its intermodal business, which provides rail brokerage and drayage services.
Brad Jacobs, chairman and chief executive officer of XPO Logistics, said, “Our two core businesses of North American less-than-truckload and tech-enabled truck brokerage are industry-leading platforms in their own right, each with a distinct operating model and a high return on invested capital. We believe that by separating these businesses through a spin-off, we can significantly enhance value creation for our customers, employees and shareholders, as we did with our successful spin-off of GXO last year.”
The company expects to complete the planned spin-off in the fourth quarter of 2022, subject to various conditions, including the effectiveness of a Form 10 registration statement, receipt of a tax opinion from counsel, the refinancing of XPO’s debt on terms satisfactory to the XPO board of directors, and final approval by the XPO board of directors, among other requirements. There can be no assurance that the planned spin-off or divestiture transactions will occur or, if one or more do occur, of the terms or timing.