XPO Logistics, Inc. XPO
(the "company") today announced that it has entered into a definitive
agreement with PSP Investments, GIC, Singapore's sovereign wealth fund,
and Ontario Teachers' Pension Plan (the "Investors") to invest a total
of $700 million in XPO to accelerate the company's growth strategy. The
company will receive all of the net proceeds, which it intends to use
primarily for unspecified acquisitions. There are no selling
shareholders.
The transaction, which is complete and scheduled to settle on September
17, 2014, provides for the sale of newly issued common stock and
preferred stock to the Investors. Upon approval by the company's
shareholders, the preferred stock will be converted into common stock
and the Investors will hold approximately 22% of XPO's common stock on a
fully diluted basis. The $30.66 price per share of common stock issuable
to the Investors represents a 5% discount to the trailing 20-day volume
weighted average price. Bradley Jacobs and Jacobs Private Equity, LLC
intend to vote in favor of the stock issuance. Jacobs Private Equity,
LLC will remain the company's largest shareholder.
The company further announced that, in light of this transaction and the
expected acceleration of its growth plans, it has raised its 2017
financial targets to approximately $9 billion of revenue and $575
million of EBITDA, up from previous targets of $7.5 billion and $425
million, respectively.
Bradley Jacobs, chairman and chief executive officer of XPO Logistics,
said, "We're delighted to welcome PSP Investments, GIC and Ontario
Teachers' Pension Plan as significant shareholders in XPO. This
strategic investment by three blue chip institutions is a strong
endorsement of our plan for value creation. With the benefit of $700
million of additional equity to accelerate our growth, we can capitalize
on an acquisition pipeline that's livelier than expected. We're now
targeting approximately $9 billion of revenue and $575 million of EBITDA
for 2017."
Daniel Garant, senior vice-president, public markets for PSP Investments,
said, "We are pleased to become a meaningful shareholder of XPO and
support its board and management as it pursues its growth strategy. This
investment in XPO is consistent with our Value Opportunities Portfolio's
mandate, which includes making strategic investments in publicly-listed
companies that we believe have the capability of generating above
average risk-adjusted returns over time and where PSP Investments can
leverage its permanent and growing capital base over a long-term
investment horizon."
Lee Kee Chong, deputy group chief investment officer and director of
integrated strategies for GIC, said, "We have a favorable view on the
U.S. economy and on the U.S. logistics industry, and are excited to
partner with Brad and the team at XPO. We are confident that XPO's
strong management team and sophisticated technology platform will enable
XPO to become one of the long-term winners in the industry."
Michael Wissell, senior vice-president, public equities for Ontario
Teachers' Pension Plan, said, "Teachers' believes in partnering with
world-class entrepreneurs. We are pleased to invest alongside Brad
Jacobs and his team. Their plans for XPO align with our approach to
long-term value creation."
For a summary of other material terms relating to the investment, see
the company's filings with the Securities and Exchange Commission. These
can be accessed on the websites www.sec.gov and www.xpo.com.
Morgan Stanley & Co. LLC is serving as placement agent for the
transaction.
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