GXO Logistics, which calls itself the world’s largest pure-play contract logistics provider, is acquiring third-party logistics firm PFSweb for $181 million in an all-stock deal, the companies announced Thursday, increasing GXO’s presence in the apparel, footwear and health and beauty categories.
The transaction is expected to be completed in the fourth quarter. The $7.50 per share price for PFSweb represents a 20% premium to the 20-day volume-weighted average price, and a 50% premium to its closing price on Wednesday. PFSweb, which stands for “priority fulfillment service,” was founded in 1994 and has a client list that includes L’Oréal USA, Champion, Pandora, Shiseido Americas and Kendra Scott.
Greenwich, CT-based GXO, which went public after spinning off from XPO Logistics in 2021, is in major acquisition mode, with a $2 billion hoard of free cash flow through 2027, GXO CEO Malcolm Wilson told Reuters in January. The company has a market capitalization of $7.22 billion, up from $6.19 billion at the beginning of the year, and in 2022 acquired UK firm Clipper Logistics for $1.3 billion.
“PFS’s platform, vertical expertise and geographic concentration make it an ideal fit for GXO,” Wilson said in a release. “Like GXO, the PFS team has established themselves as a trusted partner for some of the world’s most iconic brands and this combination will complement and expand GXO’s capabilities for new and existing customers.”
“Joining GXO represents a strong strategic next step for PFS, as well as a valuable conclusion to our strategic alternatives process,” said Mike Willoughby, CEO of PFSweb in the release. “Since completing the sale of our LiveArea business to Merkle, we have worked diligently to strengthen PFS’ operational efficiency and multi-node fulfillment network.”
LiveArea was sold to Merkle in 2021 for $250 million, a more natural fit for the consulting and marketing services unit.
According to its 2023 profile in MCM’s Top 3PL directory (editor’s note: 2024 submissions open through Nov. 10), PFSweb has 2.2 million square feet of warehouse space at eight locations in the U.S., the UK, Belgium and Canada, and average annual order volume of 300,000. It lists 102 clients, mostly in B2C, with concentrations in health and beauty (53%), apparel and footwear (14%) and consumer goods (13%). Last year, the company relocated its headquarters from Allen, TX to one of its distribution centers in nearby Irving, TX.