Bradley Jacobs talks about the deal and reveals that XPO is currently looking at other European acquisitions.
I think this thesis is playing out quickly, certainly more quickly than I thought it would. XPO is rapidly consolidating this industry. Jacobs has done it twice before in other industry. His past success is the main reason why I own this company. He has demonstrated his ability to consolidate industries and convince others to sell their companies to him. This morning I upped my bet that he will be successful and bought more shares: position size is now 6.3%.
This is not a company where you can look at earnings history, P/E and 1YRPEG because the company doesn’t have past positive earnings. Therefore, to be invested one must have confidence in Jacobs’ ability to consolidate the industry and improve the market share while increasing profitability. I think we will see that the new combination of the companies announced yesterday will lead to both higher revenue and increased operational efficiency (lower costs). It will certainly be interesting to watch this play out.