Cash-heavy XPO Logistics is continuing its hot year by entering into an agreement to acquire Ann-Arbor-based Con-way trucking for US$3 billion cash. Con-way is a Fortune 500 company with a transportation and logistics network consisting of 582 locations and around 30,000 employees.
Should the deal be finalized, all of Con-ways brands – Con-way Freight, Menlo Logistics, Con-way Truckload and Con-way Multimodal – will be rebranded as XPO Logistics. XPO did a similar logo makeover when it acquired French trucker Norbert Dentressangle earlier this summer for $3.5 billion.
With the Con-way deal, XPO Logistics will see its annual revenue rise to around $15 billion, more than six times the $2.4 billion revenue reported in 2014. Prior to this year’s acquisitions, XPO was non-asset based; now the company has a fleet of 7,700 owned trucks, 3,200 trucks contracted through owner-operators, and access to an additional 12,000 independent carriers via the Dentressangle acquisition.
Bradley Jacobs, chairman and CEO of XPO Logistics, will remain in those positions and continue to lead the company. Under Jacobs, XPO has completed at least 14 mergers and boosted its revenue almost 40 times to a projected $6.7 billion this year, according to Bloomberg. Douglas Stotlar, Con-way’s president and CEO, will serve in a limited role as an independent advisor to the combined company through the first quarter of 2016.
This latest acquisition would not only give XPO an entry into the less-than-truckload (LTL) business, it would catapult the firm to major-player status. Should the deal go through, XPO will become the second-largest LTL operator in the $35 billion North American market.
“LTL is a noncommoditized, high-value-add business that’s used by nearly all of our customers,” Jacobs said. “Con-way is a premier platform that we will run with a fresh set of eyes as part of our broader offering. Importantly, we’ll gain strategic ownership of assets that will benefit our company and our customers during periods of tight capacity.”
The transaction is scheduled to close in October.2 - Readers Like This Post