XPO Logistics Inc (NYSE: XPO) shares are up 15% on Wednesday after the American freight transportation firm revealed plans of listing its high-tech truck brokerage segment as a separate publicly traded company.
CEO Brad Jacobs’ remarks on the spin-off
Upon execution, XPO will become a pure-play trucking company. The truck brokerage business will trade on the stock exchange under a new name before the start of 2023. On CNBC’s “Squawk Box”, CEO Brad Jacobs said:
There’s two ways that we’re excelling by doing this spin-off. One is operationally, and then our most comparable peers are trading at roughly 15 times EBITDA, we’re trading at about 7.5 times. So, from a shareholder perspective, we’ll eliminate the conglomerate discount.
The announcement comes less than a year after XPO spun off its contract logistics business.
XPO is divesting other businesses as well
XPO also wants to offload its European business that will either be sold or listed on a European Stock Exchange. On top of it, the intermodal business is also up for sale. The chief executive added:
Our basic strategy is to create shareholder value and that’s why sometimes, we’ve sold off parts of companies that we bought. What we learned from the GXO spin-off last year is that when a management team is focused solely on one thing, they do a better job.
The truck brokerage business will be headquartered in Charlotte, North Carolina and will be run by a separate management team. Last month, XPO reported record revenue for its fiscal Q4.
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