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Done deal: XPO completes spinoff of brokerage unit RXO

RXO stands alone as nation’s 4th-largest TL broker

XPO's breakup is designed to release incremental shareholder value. (Photo: Jim Allen/FreightWaves)

XPO Logistics announced Tuesday that it has completed the spinoff of brokerage operation RXO Inc. The separation creates two independent, publicly traded companies.  

XPO (NYSE: XPO) shareholders received one share of RXO (NYSE: RXO) for each share held as of the close of business on Oct. 20. The shares were distributed at 12:01 a.m. EDT Tuesday.

“With the spinoff complete, XPO and RXO have both launched from positions of strength as independent public companies,” Brad Jacobs, XPO’s executive chairman and RXO’s nonexecutive chairman, stated in a news release. “I want to thank the many people who have worked to make our strategic plan a success and created powerful new avenues for value creation.”

Charlotte, North Carolina-based RXO is the nation’s fourth-largest truckload brokerage, generating $2.7 billion in truck brokerage revenue last year. The brokerage unit connects shippers to a network of approximately 100,000 carriers and over 1.5 million trucks in North America.

RXO’s asset-light platform has more than $5 billion in annual revenue when including managed transportation, freight forwarding and last-mile offerings.

The RXO Drive app connecting carriers to a tech-enabled freight platform has been downloaded 850,000 times. During the third quarter, 10,000 carriers were added to the network with 81% of brokered loads being created or covered digitally.

RXO has approximately 7,400 employees.

“[Tuesday] is a landmark moment for our business,” RXO CEO Drew Wilkerson stated in a separate release. “With the launch of RXO, we’ve established a standalone tech-enabled pure-play that will continue to thrive in any market. RXO is well-positioned to unlock value for our stakeholders.” 

XPO is a top-five LTL provider. The company will divest its European transportation unit, making it an LTL pure-play, at a later date.

XPO spun off its contract logistics business, GXO (NYSE: GXO), last year.

On Tuesday, shares of XPO were trading around $32 with shares of RXO hovering around $20. Shares of the combined XPO entity closed Monday at $51.74.

BofA Securities (NYSE: BAC), Goldman Sachs (NYSE: GS) and Morgan Stanley (NYSE: MS) were financial advisers on the transaction.

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Todd Maiden

Based in Richmond, VA, Todd is the finance editor at FreightWaves. Prior to joining FreightWaves, he covered the TLs, LTLs, railroads and brokers for RBC Capital Markets and BB&T Capital Markets. Todd began his career in banking and finance before moving over to transportation equity research where he provided stock recommendations for publicly traded transportation companies.