What the XPO deal actually says:

The stock was up $4.65 after hours, over 10%, so there must be something good in it for the company. Here’s some stuff from the press release (bolding is mine). As I see it, they changed from a local US logistics company to a world wide one without issuing any new stock. Their EBITDA run rate will be tripled overnight:

XPO Logistics to Acquire Norbert Dentressangle SA, a Leading Global Provider of Contract Logistics; Freight Brokerage and Transportation; and Global Forwarding Services. XPO to become a top ten worldwide logistics company and leading European outsourced e-fulfillment provider. The acquisition will more than triple XPOs EBITDA run rate to approximately $545 million, and increase its revenue to approximately $8.5 billion, nearly achieving the companys 2017 targets two years ahead of plan.

Complementary service offerings and geographies will enable widespread cross-selling to an established base of multinational companies. The transaction is valued at €3.24 billion ($3.53 billion USD) and is expected to close in the second quarter of 2015 Norbert Dentressangle`s supervisory board has unanimously approved entry into a tender offer support agreement.

XPO Logistics and Norbert Dentressangle SA today announced that they have entered into a definitive agreement for XPO Logistics to acquire a majority interest in Norbert Dentressangle and launch a tender offer for the remaining shares. Headquartered in Lyon, France, Norbert Dentressangle has 662 locations and approximately 42,350 employees, and serves a blue chip customer base that includes some of the worlds largest companies. Norbert Dentressangles transportation and logistics services complement XPO`s offerings in contract logistics, freight brokerage and global forwarding. The company had €5.1 billion ($5.5 billion USD) in pro-forma trailing 12-month revenue for the year-ended December 31, 2014.

Highlights of the Proposed Transaction The market value of the transaction for Norbert Dentressangle shareholders is €2.17 billion, based on 9.9 million fully-diluted outstanding shares. The total transaction value is approximately €3.24 billion, including €1.08 billion of net debt. The board of directors of XPO and the supervisory board of Norbert Dentressangle have unanimously approved the transaction.

XPO has entered into a binding agreement to purchase from Mr. Norbert Dentressangle and his family all of their shares in Norbert Dentressangle, representing 67% of the company`s outstanding shares. The agreed price per share is €217.50, excluding €1.80 dividend per share to be paid prior to the close of the transaction. The transaction is subject only to receipt of antitrust clearances in the United States and Germany. Following receipt of such clearances, XPO will launch an all-cash simplified tender offer to acquire the remaining outstanding shares of Norbert Dentressangle… The proposed transactions are structured in accordance with the General Regulation of the French securities regulator, the Autorité des marchés financiers, and all applicable securities laws and regulations in the United States.

The purchase price represents an aggregate consideration of 9.1 times consensus 2015 EBITDA of €357 million (approximately $388 million USD). The per-share cash price represents a premium of approximately 34 percent compared to the closing price of Norbert Dentressangle ordinary shares on April 27, 2015.

The transaction is not conditioned on financing. Morgan Stanley has provided a financing commitment for up to $2.6 billion. XPO has over $1 billion in cash and an undrawn $415 million ABL revolver.
Hervé Montjotin, chairman of the executive board and chief executive officer of Norbert Dentressangle, will serve as chief executive officer of XPO`s European business and president of the parent company. XPO intends not to reduce the total number of full-time employees in France for a period of at least 18 months from closing…

Bradley Jacobs, chairman and chief executive officer of XPO Logistics, said, “This is a defining moment in the growth of XPO. Our planned acquisition of Norbert Dentressangle will catapult XPO to a top ten global logistics company. It will more than triple our EBITDA to $545 million and increase our revenue to about $8.5 billion upon completion of the tender offer, nearly achieving our 2017 financial targets two years ahead of plan. The acquisition of Norbert Dentressangle is a major leap forward, but we`re still in the early innings of our long-term growth plan.”

Jacobs continued, “In Norbert Dentressangle, we are acquiring a company that has been meticulously built over the last four decades. I am extremely pleased that Norbert Dentressangles executive leader, Hervé Montjotin, will serve as chief executive officer of our European business and president of the parent company. I look forward to working closely with Hervé as we execute XPOs global strategy.”

Hervé Montjotin, chairman of the executive board and chief executive officer of Norbert Dentressangle, said, “By joining XPO, we will become part of an organization that shares the ambition that has guided us since the creation of Norbert Dentressangle 36 years ago: to become a global partner able to effectively support our customers in the management of their supply chains. As XPO`s platform for growth in Europe, we can continue to pursue this goal on an even larger scale, to the benefit of our customers and employees. I am proud to lead this growth for XPO, together with the current management board.”

Norbert Dentressangle offers services that strongly mirror XPO`s portfolio: contract logistics, including e-fulfillment; freight brokerage; an asset-light palletized network; freight management; dedicated and owned truckload; and global freight forwarding. XPO intends to use the acquired operations as a platform to grow its business in Europe.

XPO expects to realize substantial, company-wide cross-selling opportunities from the combination. For 36 years, Norbert Dentressangle has built a loyal base of blue chip customers that includes multinational companies, many of which are not currently served by XPO. These customers will have an opportunity to consolidate their supply chain relationships with XPO and benefit from a single source with a global footprint.

Norbert Dentressangle serves customers in retail, food and beverage, manufacturing, chemicals, agriculture, e-commerce and high tech. The companys largest customer represents less than 4% of revenue.* *Norbert Dentressangles Red Online service leads the €5 billion outsourced e-fulfillment market in Europe, with €242 million revenue in 2014 and 31% organic growth. It serves both B2B and B2C customers in the United Kingdom, Spain and France. Norbert Dentressangle has leading capabilities in high-growth reverse logistics.
XPO will gain global scale in freight brokerage and managed transportation, two of its core services, with the ability to employ technology and best practices. XPO intends to deploy its proprietary Freight Optimizer platform in Europe to facilitate best-in-class carrier sourcing and customer service. Norbert Dentressangle currently generates over €1 billion of freight brokerage revenue annually. Road transport in its primary markets of the United Kingdom, Spain and France is an estimated €95 billion opportunity.
The transaction will give XPO access to Europes largest fleet network through a mix of 7,700 owned trucks, 3,200 trucks contracted through owner-operators and access to an additional 12,000 independent carriers. XPO will gain lane density covering approximately 90% of the eurozones GDP-producing regions. Norbert`s transportation business includes €250 million of revenue from dedicated carriage.

_*Asset intensity in Norbert Dentressangles business is low, with annual net capex of approximately 2.5% of revenue on average.**_ *The transaction will create a top ten worldwide contract logistics company based on combined revenue and 129 million square feet of facility space. Most of the facilities are leased and dedicated to high-value-added warehousing operations, including cold chain and reverse logistics. Norbert Dentressangles €2.6 billion contract logistics business has deep customer relationships as evidenced by a 97% customer renewal rate. Approximately 26% of contract logistics revenues are generated in the United States.

The combination will increase XPO`s global freight forwarding revenue to approximately $425 million annually and provide greater access to Euro-Asia trade lanes. XPO expects the added volume to improve its air and sea transportation buy rates for its customers. XPO intends to make substantial investments in the growth of its acquired European operations, in part through the application of technology. XPO expects its combined annual spend on technology to be approximately $225 million after closing. XPO has looked beyond North America to capitalize on three favorable dynamics: the timing of its investment in the eurozone as the economy begins to rebound from the trough; a strong U.S. dollar relative to the euro; and the acquisition opportunities presented by a fragmented European transportation and logistics industry where Norbert Dentressangle holds leadership positions. Substantially all of the management team of Norbert Dentressangle is expected to join XPO upon completion of the transaction.

XPOs multinational operations will further enhance the companys position as an employer of choice that facilitates the worldwide sharing of best practices in support of operational excellence. The combination will create numerous opportunities for its employees to move within Europe and between North America and Europe.

Following the closing, XPO will rebrand the acquired operations under the single global name XPO Logistics. The company expects to have combined scale of approximately 52,350 employees at 863 locations in 27 countries.


Thank you Saul. I bought XPO after you brought to our attention here on this board. Yesterday morning, after watching the short interview for which you posted the link, I bought 700 more shares. Even though I thought the interview was pretty unsatisfying, I felt Jacobs demonstrated that he really knew what he was up to, it was the interviewer who was out of his element.

By the way, not too long ago I posted here that I was uncertain about what I should do about a number of my positions. Quite a few of folks who read this board responded. I sold off a lot of the smaller positions (including several I had not included in my list). I used the money to extend my investments in CRTO and XPO. Apparently I’m now heavily invested in French companies. I never woulda thunk it???

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The company expects to have combined scale of approximately 52,350 employees at 863 locations in 27 countries.

I got the number of employees right! :wink:

Denny Schlesinger