On Wednesday, XPO Logistics announced its set to acquire Con-way, a trucking company for $3 billion including the $290 million in debt.
Headquartered in Michigan, Con-way is a Fortune 500 company functioning at 582 locations with 30,000 employees on the transportation and logistics network. For the complete year of 2015, the company’s project revenue is $5.7 billion and with the acquisition of the company XPO projects an annual revenue of $15 million. The deal is expected to put XPO directly into the trucking business in the U.S for the first time, that would transform the company from being a middleman between shippers and carriers to a company that generates one-third of its revenue from truck fleet and other hard assets.
As part of the deal, XPO would soon begin a tender offer for Con-Way’s shares at $47.60 per share. According to FactSet, the company’s shares closed at $35.53 on Wednesday and shot up 33% in after-hours trading.
XPO Logistics’ CEO Bradley Jacobs said, “Con-way is a premier platform that will run with a fresh set of eyes as part of our broader offering.” XPO has acquired more than a dozen companies in a year which includes Menlo Logistics and Con-way Truckload will be rebranded as XPO logistics. The company seems to be working on the target of $23 billion in annual revenue in 2019.
Douglas Stotlar, Con-way’s president and CEO would serve in a non-executive advisory capacity during the transition period. It is still not very clear how the employees of Con-way would be affected. Stotlar said, “The combination will mean more service for our customers, more miles for our drives and more career opportunities for our employees as part of XPO’s global organization,” in a statement.