Why XPO Logistics Is Splitting in Half
XPO Logistics (NYSE: XPO), one of the world's biggest providers of logistics and transportation services, is set to split in half.
The company will spin off its contract logistics segment, which includes 200 million square feet of warehouses in 27 countries around the world, from its transportation business. The latter is made up of its freight brokerage, less-than-truckload (LTL) business, and last-mile e-commerce business, which specializes in delivery of heavy goods like appliances and furniture. Freight brokerage and LTL make up the bulk of the transportation segment, contributing 90% of EBITDA.
Wall Street cheered the move, sending the stock up 5.8% on Dec. 3,but the news wasn't a complete surprise. XPO had announced a strategic review of its business in January, which included selling or spinning off all parts of the business except for LTL. At the time, CEO Brad Jacobs said that despite the stock's strong performance, it continues "to trade at well below the sum of our parts and at a significant discount to our pure-play peers."
Source Fool.com
