XPO sticks to its buying streak
Third party logistics (3PL) provider XPO Logistics is remaining in an acquisition frame of mind by proposing to by rival Pacer International for some $335 million after only recently wrapping up the purchase of Landstar System’s supply chain subsidiary last month for $87 million.
Bradley Jacobs, XPO’s chairman and CEO, said in a statement the company's deal to buy Pacer – a 3PL founded in 1997 that handles approximately 10% of all domestic U.S. intermodal freight movements – will make XPO the third largest North American provider of intermodal services, one of the fastest-growing areas of transportation logistics.
“We'll also be the largest provider of intermodal services in the burgeoning cross-border Mexico market, where growth is being driven by a trend toward near-shoring manufacturing,” he added. “We expect this transaction to be significantly and immediately accretive to our earnings and accelerate our growth company-wide."
Pacer, which generated total revenue of some $1 billion in 2013 through its 30 locations and approximately 950 employees, is the 11th acquisition XPO’s made in the last two years.
The deal also comes on the heal of XPO’s successful acquisition of Landstar’s Michigan-based supply chain division (LSCS) in December, a deal Henry Gerkens, Landstar’s Chairman, president and CEO Henry, belived offered his company and its shareholders “an excellent return” on the creation of its 3PL arm in 2009.
“Over the past four years, we have come to believe that LSCS is better suited for a company store type operation rather than Landstar's core agent-based model,” Gerkens explained in a statement. “Our overall strategy and focus now will continue to include growing our core business model by investing in technological solutions and businesses that support and expand our agent, customer and third party capacity provider base.”
