• DTS.USA
    5.829
    -0.005
    -0.1%
  • NTI.USA
    2.860
    0.010
    0.4%
  • NTID.USA
    2.820
    -0.040
    -1.4%
  • NTIDL.USA
    1.930
    -0.030
    -1.5%
  • OTRI.USA
    7.990
    0.040
    0.5%
  • OTVI.USA
    12,810.370
    100.000
    0.8%
  • DTS.USA
    5.829
    -0.005
    -0.1%
  • NTI.USA
    2.860
    0.010
    0.4%
  • NTID.USA
    2.820
    -0.040
    -1.4%
  • NTIDL.USA
    1.930
    -0.030
    -1.5%
  • OTRI.USA
    7.990
    0.040
    0.5%
  • OTVI.USA
    12,810.370
    100.000
    0.8%
FinanceModern ShipperNewsTop StoriesWarehouse

GXO makes firm offer for Clipper Logistics

Clipper to be acquired in $1.3 billion cash and equity transaction

GXO Logistics announced Monday a firm offer to acquire U.K.-based Clipper Logistics. Terms of the offer are unchanged and if successful, GXO would acquire Clipper for approximately $1.3 billion in a cash and equity transaction.

Under the proposed deal, Clipper (CLG.L.EB) shareholders will receive 920 pence ($12.33) per share, 75% of which would be distributed in cash with the remainder coming from newly issued shares of GXO stock.

GXO (NYSE: GXO) previously announced Feb. 20 that Clipper had agreed to terms of a possible offer. Insiders holding 23.3% of Clipper’s stock, including Executive Chairman Steve Parkin, agreed irrevocably to the terms of the transaction.

“Together, GXO and Clipper have a one-of-a-kind growth opportunity, building on our shared commitment to a top-quality customer experience, innovation and industry-leading expertise,” GXO CEO Malcolm Wilson said. “Steve Parkin and the Clipper team have created an exceptional business with outstanding capabilities. We will build on it.”

The deal helps expand GXO’s e-commerce and e-fulfillment platforms. Clipper primarily runs a shared distribution network of approximately 50 facilities (15 million square feet of space) throughout the U.K., Germany and Poland, facilitating e-commerce and returns functions for multiple customers out of the same location.

The company reported revenue of $946 million in its recent fiscal year ended April 30, 2021, but revenue growth was 33% higher year-over-year through the first half of its current fiscal year.

“We’ll strengthen our returns and repairs capabilities, expand our e-commerce customer base and bolster our presence in key growth areas, including Germany, Poland and life sciences, and accelerate the expansion of GXO Direct to Europe,” Wilson added.

In addition to cross-sell opportunities across the two platforms, operating cost synergies are expected to equal $48 million three full years into the deal. The press release said a portion of the cost synergies will come from operational overlap but noted that headcount in the U.K. will see long-term growth given GXO’s ongoing initiatives in the region.

Clipper operated at a 12% EBITDA margin in its recent full fiscal year.

The deal is expected to be immediately accretive to earnings excluding synergies and “double-digit enhancing” when including the full impact of the cost reductions. The transaction is expected to cover its cost of capital three full years after closing.

The deal price implies a less than 12x enterprise value-to-EBITDA multiple based on trailing results. It also represents an 18% premium to Clipper’s closing share price on the last day of trading prior to the announcement of a possible offer and a 32% premium to the three-month weighted average share price.           

GXO has completed several acquisitions in recent years. In addition to M&A, the company has multiple organic growth opportunities ahead as it plays for share in the $430 billion logistics markets of North America and Europe.

“We believe our very strong cultural fit, deep familiarity with local industry dynamics and commitment to invest and grow in highly attractive markets will enable a seamless integration,” Wilson continued. “We’re very excited about the tremendous possibilities ahead and the value we can create for customers, employees, shareholders and the communities we serve.”

Acquisition price~$1.3B
Combined value~$13B enterprise value
Clipper’s revenue run rate$946M in FY21
GXO’s revenue run rate$7.9B in 2021
Earnings potential12% EBITDA margin, immediately accretive to EPS (double-digit accretion post full synergies)
Financing75% cash, 25% equity
Other acquisitionsMenlo Logistics, Norbert Dentressangle & New Breed Logistics
Table: Company reports

Click for more FreightWaves articles by Todd Maiden.

Watch: What is a closed loop system?

The FREIGHTWAVES TOP 500 For-Hire Carriers list includes U.S. Xpress (No. 13), Hirschbach (No. 53) and John Christner Trucking (No. 108).

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.

3 Comments

  1. I get paid over $190 per hour working from home with 2 kids at home. I never thought I’d be able to do it but my best friend earns over 10k a month doing this and she convinced me to try. The potential with this is endless. Here’s what I’ve been doing..

    Copy HERE ===))> https://www.worksful.com

    1. =❤️= [ JOIN US ]
      I get paid more than 💰$190 to 💰$395 per HOUR for working online. I heard about this job 3 months ago and after joining this I have earned easily 💰$23k from this without having online working skills . Simply give it a shot on the accompanying site…
      copy and open this site .…………>> 𝗪𝘄𝘄.𝗡𝗘𝗧𝗖𝗔𝗦𝗛𝟭.𝗖𝗼𝗺

  2. I am making $150 every hour by working on the web at home. A month ago I have gotten $19723 from this activity. This activity is exceptionally astounding and its normal income for me is superior to anything my past office work. This activity is for all and everyone can without much of a stretch join this correct now by utilize this link.
    Copy Here……===))> https://www.fuljobz.com