Why XPO Logistics Is Splitting Up Again
After a successful business separation last year, XPO Logistics (NYSE: XPO) is looking to the same playbook again. The company announced in March it was planning to separate the truck brokerage business from its core LTL operations, and new details emerged on the plans in its latest earnings report.
Management said it is confident that such a move can unlock value for shareholders once again, as the company still believes that the business is undervalued by the market due to its complexity and high leverage ratio. CEO Brad Jacobs made a similar observation ahead of the GXO spin-off of GXO Logistics (NYSE: GXO) in August 2021, which has been a clear success. At the time of the spin-off, XPO's market cap was roughly $10 billion. Today, XPO's and GXO's market caps, when combined, total $11.5 billion (a gain of 15%) while the S&P 500 is down 6% since then.
Image source: XPO Logistics.
Source Fool.com
