XPO recently resumed efforts to sell its European transportation unit, according to a Bloomberg report. The company scrubbed the plan at the end of 2022 due to weakening capital markets in Europe, but the board’s authorization to divest the unit remained in place.
The renewed efforts to sell the business come as little surprise: The company referred to the plan as “not a matter of if, but when” on its first-quarter call. Prior plans for divestiture also included a potential public listing on a European stock exchange. The sale of the business would be the last piece of a 2020 breakup plan to divest all units, leaving XPO as a pure-play, less-than-truckload carrier.
XPO’s (NYSE: XPO) European business generated $3.1 billion in revenue and $167 million in adjusted earnings before interest, taxes, depreciation and amortization over the 12-month period ended June 30. The unit could sell for roughly $2 billion – somewhere between one time revenue and 10 times EBITDA – an M&A expert asking to remain anonymous told FreightWaves.
XPO touts the business as a category leader in many countries throughout Europe, providing dedicated truckload, LTL, truck brokerage, managed transportation, last-mile and freight forwarding services, among others. XPO’s second-quarter report showed the sales pipeline in Europe increased to a record $1.3 billion and that volumes improved throughout the period as pricing outpaced inflation.
In an effort to increase shareholder value, XPO embarked on a plan in late 2020 to break up the transportation and logistics conglomerate, which was amassed through a decade’s worth of acquisitions. The company spun off its contract logistics business GXO (NYSE: GXO) in 2021, and sold its intermodal unit and spun off its brokerage business RXO (NYSE: RXO) in 2022.
“We don’t comment on market rumors or speculation,” a spokesperson from XPO told FreightWaves.