XPO Says $700 Million Funding Will Speed Acquisitions
XPO Logistics Inc. said three investors have agreed to a $700 million infusion of equity that will enable the company to accelerate its revenue and profitability growth plans.
The investors are PSP Investments, GIC, which is Singapore’s sovereign wealth fund, and the Ontario Teachers’ Pension Plan. The investors will be receiving about 23 million newly issued shares, which will make them collectively 22% holders of the company’s common stock.
The infusion will enable XPO to target a $9 billion annual revenue and $575 million in earnings before interest, taxes, depreciation and amortization, or EBITDA. That’s an increase of more than 20% from prior revenue guidance and 35% more EBITDA. At a $9 billion annual pace, only C.H. Robinson Worldwide would be larger than XPO in the domestic brokerage and logistics markets.
“This is a major strategic investment, and it is a clear vote of confidence,” CEO Bradley Jacobs told TT. “This $700 million in addition to the $300 million of liquidity that we have gives us over $1 billion for acquisitions. That should hold us over for some time.”
“The acquisition pipeline is livelier than expected,” Jacobs told TT, without giving details or a timeline. “We like the businesses we are in and the acquisitions will be in those sectors.”
Over three years, the company has expanded from a $150 million base focused on brokerage and expedited service into an operation with a $3 billion annual revenue pace that includes logistics, intermodal and last-mile delivery.
