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XPO Logistics Said Near Deal to Buy Con-way for $3 Billion Cash

By Ed Hammond and Jeffrey McCracken / www.supplychain247.com / September 9th, 2015

 

"The Con-way transaction will nearly double our pro-forma full year EBITDA to approximately $1.1 billion and increase our revenue to $15 billion upon closing," XPO CEO Bradley Jacobs said in a statement.

As reported by Bloomberg Business, XPO Logistics Inc., the acquisitive supply-chain services company, is closing in on a $3 billion deal for rival trucker Con-way Inc., people with knowledge of the matter said.

XPO, based in Greenwich, Connecticut, has reached a preliminary agreement with Con-way on price and structure for an all-cash takeover, said the people, who asked not to be identified because the information is private.

A deal could be announced as soon as Wednesday, the people said.

Final details are still being negotiated, and talks could fall apart.

Con-way, based in Ann Arbor, Michigan, specializes in less-than-truckload shipping, putting goods from multiple customers in each trailer. The company’s shares closed at $36.18 Tuesday in New York, giving it a market value of about $2.1 billion. XPO has a market value of about $3.3 billion.

A deal would extend the string of transactions that have helped XPO become a powerhouse in the global logistics market. The company has been led by serial dealmaker Brad Jacobs since 2011. In that period, it has completed at least 14 mergers and increased its revenue to a projected $6.7 billion this year from $177 million, according to data compiled by Bloomberg.

In an interview with Bloomberg in April, Jacobs said XPO was in the “early innings” of its growth plan after completing a $3.53 billion deal for French freight group Norbert Dentressangle SA.

Representatives for both XPO and Con-way declined to comment.

Con-way shares up 33% after $3 billion deal with XPO Logistics
Shares of Con-way Inc. CNW, -1.80% rallied 33% in after-hours trading Wednesday after XPO Logistics Inc. XPO, -2.88% said it had agreed to buy the Ann Arbor, Mich.-based Con-way for $3 billion. Under the terms of the agreement, XPO will launch a tender offer for all Con-way’s shares at a cash price of $47.60 a share.

That’s 34% higher than Con-way’s Wednesday closing price of $35.53. The deal was valued at $3 billion, including $290 million in debt. Bradley Jacobs, XPO’s chairman and chief executive, will keep these positions at the combined company. Shares of XPO were flat in late trading after ending the day down 2.4%.

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