XPO Logistics Acquires 10th Company in 2 Years
XPO Logistics, Inc. (NYSE: XPO) announced on December 11, 2013, that it has entered into a definitive agreement with Landstar System, Inc. to acquire NLM, the largest provider of web-based expedited transportation management in North America. A second technology product, A3i, is included in the planned acquisition.
NLM, a subsidiary business of Landstar System, Inc., uses proprietary web-based software to provide dynamic transportation management services for customers and carriers: from bidding, scheduling and shipping, to tracking, reporting and carrier scoring. The technology today is focused on primarily serving the expedited transportation sector. Since its inception in 1989, NLM has managed over 4.7 million shipments representing more than $3.5 billion in total transportation spend.
The purchase price is $87 million in cash, subject to working capital adjustment. The company expects to acquire at closing cash in the amount of $10 million to $13 million. The transaction is expected to close by mid-January 2014, subject to Hart-Scott-Rodino clearance and customary conditions. The company intends to fund the transaction with available cash on hand, including the acquired cash, and its ABL facility.
XPO Logistics, Inc. is one of the fastest growing providers of transportation logistics services in North America: the fourth largest freight brokerage firm, the largest provider of heavy goods, last-mile logistics, and a top five expediter, with growing positions in global freight forwarding, intermodal and less-than-truckload brokerage. The company facilitates more than 18,500 deliveries a day throughout the U.S., Mexico and Canada.
Ably piloted by Bradley Jacobs, Chairman and Chief Executive Officer of XPO Logistics, the company has expanded exponentially over the last two years of operation through careful acquisitions of compatible existing companies.
Jacobs said, "The addition of NLM, the largest web-based expediter in North America, will give us an entry into managed transportation - an area of logistics that has been of keen interest to us for some time. We will use NLM to build on our position as a top five expediter by providing customers with precise, web-based capabilities for the bidding, scheduling, shipping and tracking of freight. With the close of this transaction, we'll be facilitating more than 20,000 deliveries a day company-wide."
Jacobs continued, "Like XPO, NLM understands the unique demands of expedite customers and has a laser focus on on-time performance. Its proprietary software constantly assesses hundreds of carrier analytics while facilitating over 450,000 loads a year for some of the largest and most exacting shippers in North America. NLM is our tenth acquisition in two years, and we intend to scale it up by including managed transportation in the services we offer to new and existing customers."
Scott Malat, Chief Strategy Officer for XPO Logistics, said that web-based managed transportation is becoming increasingly utilized by shippers with expedite needs. â€œMore shippers are moving to just-in-time freight due to the cost effectiveness of having goods delivered as needed, instead of sitting on the floor. The ability to manage and track expedite shipments on the web adds ease of use.â€
With the acquisition of NLM, Malat said that XPO Logistics will continue its policy of retaining personnel within an acquired company and increasing staff as needed. â€œXPO is dedicated to creating jobs,â€ said Malat. â€œWe have more than 2,000 people currently employed at XPO, and weâ€™re growing. Our philosophy is that, as management, we have a responsibility to make the decisions that will help our people be successful.â€