PSP Investments, GIC And Ontario Teachers' Pension Plan Agree To Invest $700M In XPO Logistics

XPO Logistics, Inc.

(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.