XPO Logistics has entered into a definitive agreement with Landstar System to acquire NLM, the largest provider of Web-based expedited transportation management in North America.
A second technology product, A3i, is included in the planned acquisition. The acquisition is expected to be immediately accretive to earnings, exclusive of any synergies with the company's existing expedite business.
NLM is the market leader for Web-managed services for the expedite sector, where freight typically needs to be moved within a short timeframe and with absolute reliability. NLM's proprietary online auction system allows carriers to bid on loads that are then awarded electronically, generating a transaction management fee for NLM.
The purchase price is $87 million in cash, subject to working capital adjustment. The company expects to acquire at closing between $10 million and $13 million in cash. The transaction is expected to close by mid-January 2014, subject to Hart-Scott-Rodino clearance and customary conditions. The company intends to fund the transaction with available cash on hand, including the acquired cash, and its ABL facility.
For the trailing 12 months through November 2013, NLM managed approximately $500 million of gross total transportation spend and generated $9.8 million of adjusted EBITDA on $23.4 million of transaction management fee revenue.
"The addition of NLM, the largest web-based expediter in North America, will give us an entry into managed transportation — an area of logistics that has been of keen interest to us for some time,” said Bradley Jacobs, chairman and CEO of XPO Logistics. “We'll use NLM to build on our position as a top five expediter by providing customers with precise, Web-based capabilities for the bidding, scheduling, shipping and tracking of freight. With the close of this transaction, we'll be facilitating more than 20,000 deliveries a day company-wide."
EVE Partners is serving as adviser to the company's board of directors on the NLM transaction.