The truck brokerage and third-party logistics company XPO Logistics said Monday it acquired 3PD Inc., a non-asset, third-party provider of last-mile logistics for heavy goods in North America, in a deal worth $365 million.
The acquisition was mostly made with cash ($357 million) and is expected to close in the third quarter. XPO has secured a $195 million term loan from the Credit Suisse Group to help fund the transaction.
3PD, based in Atlanta, was founded by Karl and Randy Meyer in 2001 to capitalize on rapid growth in the last-mile logistics segment serving retail shippers. The business reported year-over-year growth in adjusted (earnings before tax, interest, and depreciation) of 20 percent and 36 percent for the full year 2012 and the first five months of 2013, respectively.
“3PD provides blue chip retailers with customized solutions tailored to their supply chain needs, and serves small and mid-sized shippers by matching them to carriers on a transactional basis,” XPO said in a statement. “ The business has differentiated itself through its ability to assure a superb customer experience using proprietary technology and industry-leading process management.”
All of 3PD's executives have agreed to join XPO and will continue to lead the operation.
"Our acquisition of 3PD advances our strategy for rapid, disciplined growth in non-asset transportation logistics,” said Brad Jacobs, chairman and chief executive officer of XPO Logistics. “3PD is the clear market leader in the heavy goods, last-mile delivery space – an extremely fast-growing segment that serves blue chip retailers, e-commerce companies and smaller retailers. XPO will be a direct provider of a high-margin, high cash flow service that's filling a growing need of consumers and shippers, including our own customers.
“3PD's offerings fit squarely within our core competency and complement our current range of services. Very soon, 3PD's customers will have the convenience of white glove deliveries, truck brokerage, freight forwarding and expedite services through a single source," he added.
American Shipper wrote about XPO Logistics
in December. - Eric Johnson