XPO In Line for 28 Yellow Properties for $870 Million

A Yellow terminal in Nashville, Tenn., and an XPO truck. (George Walker IV/Associated Press; inset by XPO)

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Less-than-truckload carrier XPO Inc. has agreed to pay $870 million for 26 owned terminals and two leased properties that previously were operated by Yellow Corp., emerging as a top bidder in the managed sale of the bankrupt LTL carrier’s assets, court documents show.

However, one of Yellow’s other top suitors — Old Dominion Freight Lines — did not land any of the properties in this initial sale.

The XPO offer was among the largest from the auction’s initial results, which began Nov. 28 and which saw 128 out of Yellow’s 169 owned properties sold to 21 different buyers, documents filed late Dec. 4 show.

Greenwich, Conn.-based XPO ranks No. 5 on the Transport Topics Top 100 list of the largest for-hire carriers in North America and No. 4 on TT’s list of the largest less-than-truckload carriers in North America. XPO had no comment on the results.

The auction brought an aggregate financial haul of nearly $1.9 billion, paid by a combination of Yellow’s one-time LTL rivals and real estate companies.

Another 46 owned properties remain to be sold in the auction, which is ongoing, the administrators said.

The overall price paid for these terminals tops by 19% a $1.525 billion stalking horse bid for the company’s terminals previously submitted by Estes Express Lines, with a number of major Yellow terminals remaining on the sales block.

Still, Richmond, Va.-based Estes landed the second-largest number of terminals in the auction, securing 24 owned terminals for a combined $248.72 million. Estes was not immediately available for comment Dec. 5. Estes Express ranks No. 14 on the TT 100 for-hire carriers list and No. 5 on the LTL list.

Two other bidders won multiple properties with combined bids topping $200 million — Saia Motor Freight Line and real estate investor Ramar Land Corp. Saia Inc. ranks No. 21 on the TT 100 for-hire carriers list and No. 9 on the LTL list.

Saia was the winning bidder for 17 facilities, agreeing to pay a combined $235.7 million. The terminals include facilities in Fresno, Calif.; Bowling Green, Ky.; West Boston, Mass.; Grand Rapids, Mich.; Trenton, N.J.; Rochester, N.Y.; Akron, Ohio; and Laredo, Texas. The company said the sale is expected to close in the first quarter of 2024.

“The addition of these new facilities furthers our multiyear strategy of expanding Saia’s national terminal footprint and, as they are opened over time, they will enable us to provide better service to both new and existing customers,” Saia CEO Fritz Holzgrefe said in a Dec. 5 statement.

Related video: XPO founder Brad Jacobs is launching his own acquisition firm.

However, Hendersonville, N.C.-based Old Dominion failed to land any terminals in the sale after emerging as an early suitor for all of the terminals with a $1.5 billion stalking horse bid. Estes upped the ante with its larger offer before the facilities hit the auction block. ODFL ranks No. 10 on the TT 100 for-hire carriers list and No. 2 on the LTL list.

Another bidder left on the sidelines was Next Century Logistics, a late entrant into the bidding process. The group is led by current Jack Cooper Transport Executive Chair Sarah Amico, who wants to reanimate Yellow in some capacity with unionized employees.

Next Century Logistics plans to purchase terminals plus rolling stock and employ around 15,000 ex-employees, according to sources close to the bid.

The bid, submitted Nov. 28, is worth $3.1 billion, including $1.15 billion in cash. Amico, a third-generation trucking company executive, envisions an integrated footprint from day one and a revamped customer experience, the sources said.

TT’s top-ranked LTL carrier, FedEx Freight, was also absent from the list of winning bidders.

A hearing is scheduled for 10 a.m. EST on Dec. 12 to approve the sale of the terminals.

Some 12 buyers accounted for around 90% of the properties purchased. J.P. Morgan analyst Brian Ossenbeck in a Dec. 5 research note estimates that 92% of the properties sold went to current LTL carriers.

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Ossenbeck 

“We believe this outcome supports the view that the industry will remain capacity- and price-disciplined since the assets were widely spread out to incumbent LTL carriers,” Ossenbeck said. He noted that Knight-Swift Transportation Holdings picked up 13 properties for $51.3 million.

Knight-Swift ranked No. 7 on the TT for-hire Top 100 even before acquiring U.S. Xpress in March.

Ten real estate entities bought 33 properties for a combined $380 million.

The terminals owned by Yellow — many situated in major urban areas — were viewed by analysts as some of the best locations in the industry. As a result, they were also attractive to real estate investors.

Some 147 of Yellow’s 149 leased properties are still on the block, alongside the remaining 46 owned properties. Among the owned properties are a 426-door Chicago Heights facility, a 304-door Maybrook, N.Y., terminal and a 216-door facility in Cincinnati, court documents show. The largest remaining leased facilities on offer are a 325-door terminal in Bloomington, Calif., a 274-door facility in Charlotte and a 227-door terminal in Atlanta.

“We believe the rest of the leased assets could present some compelling opportunities with good terms and multiple extensions, which could make these look liked owned terminals for the next two decades,” said Ossenbeck, adding that the leased terminal auction will continue “this week and potentially into next.”

At the time Yellow sought court protection from its creditors in August, the company ranked No. 13 on the TT 100 for-hire carriers list and No. 3 on the LTL list.

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