XPO Logistics’ spin-off business officially named GXO
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XPO Logistics first announced the spin-off in early December, saying the change would result in “separate businesses with clearly delineated service offerings”:
XPO board currently believes that the optimal path to unlock aggregate equity value is to create two independent companies that are each well-equipped to capitalize on secular growth trends in their sectors. If completed, the spin-off will result in separate businesses with clearly delineated service offerings: XPORemainCo, a global provider of less-than-truckload (LTL) and truck brokerage transportation services; and NewCo, the second largest contract logistics provider in the world. Both companies are expected to trade on the New York Stock Exchange.
In addition, XPO stressed that a lower debt profile with enhanced earnings potential would make it easier to achieve each company’s target of an investment-grade credit rating.
In a statement published yesterday, XPO said its spin-off “will be in a strong position to capitalize on the logistics industry’s predominant secular tailwinds: the growth in e-commerce and omnichannel retail, fast-growing customer demand for automation and digital capabilities, and a shift toward outsourcing supply chain services.”
XPO also argues that GXO will have an “undiluted focus” on its strategic priorities and blue-chip customer base, with a standalone equity currency to create long-term value for its stakeholders.
Malcolm Wilson, XPO’s chief executive officer for Europe, has been named as the CEO of GXO.
Commenting on the announcement, Wilson said:
“The new company’s brand identity captures the qualities that make us an industry leader — our ability to deliver faster, leaner, smarter logistics for customers at lower cost, using advanced automation and data science.”
Photo credits: XPO Logistics / GXO