XPO Explores Sale or Spinoff of Up to 4 Business Units, Just Not LTL

Saying the market hasn’t been rewarding the company as it should, the board of XPO Logistics said the company is exploring strategic options including the sale or spinoff of up to four business units, which would not include its less-than-truckload shipping business.

“XPO is the 7th best-performing stock of the last decade on the Fortune 500, based on Bloomberg market data,” said Bradley Jacobs, chairman and CEO of XPO in a release. “The share price has increased more than tenfold since our investment in 2011. Still, we continue to trade at well below the sum of our parts and at a significant discount to our pure-play peers. That’s why we believe the best way to continue to maximize shareholder value is to explore our options, while remaining intensely committed to the satisfaction of our customers and employees.”

According to the Wall Street Journal, XPO spent $8 billion on acquisitions between 2011 and 2015, including U.S. trucker Con-way Inc., as well as freight brokerage, last-mile delivery, warehousing and supply chain services.

XPO said it has retained Goldman Sachs and J.P. Morgan Securities as financial advisors, and Wachtell, Lipton, Rosen & Katz as its legal advisor to assist with the review process.

Jacobs told the WSJ that Goldman Sachs and J.P. Morgan have been “mandated to run four simultaneous auction processes”: for XPO’s European transportation and supply chain units, its supply chain business in the Americas and Asia-Pacific and its North American transportation unit, less the LTL business. “We may not sell all four, we may sell none,” said Mr. Jacobs.

XPO did not provide a timeline for the review process, adding “there can be no assurance of any specific outcome.”

In 2017 Home Depot was reportedly considering an acquisition of XPO, according to ReCode.