XPO Logistics Inc. (NYSE: XPO) spent $50 million for the freight brokerage division of Ozburn-Hessey Logistics LLC (OHL), the latest move from a company that promised to be at the forefront of a consolidating sector.
XPO Logistics’ chief executive Bradley Jacobs told Mergers & Acquisitions in January that the logistics industry is fragmented and ripe for M&A, adding that XPO would be on the hunt for potential targets.
The most recent deal, announced late Oct. 25, is the third acquisition for XPO. The Buchanan, Mich.-based buyer set its sights on the Ozburn-Hessey unit, Turbo Logistics Inc., not long after it scooped up Toronto-based Kelron Logisitcs Inc. for $8 million in August and Columbia, S.C.-based Continental Freight Services Inc. for $3.4 million in May.
Turbo, XPO’s largest transaction, was founded in 1984 and serves more than 600 customers across four locations including Dallas, Chicago, Gainesville, Ga. and Reno, Nev.
The company had 170 employees and generated $124 million in revenue over the course of 12 months, as of Sept. 30.
“It has strong customer and carrier relationships in attractive end markets,” Jacobs says, referring to Turbo’s shipping capabilities, especially when it comes to temperature control for transporting goods in the retail, manufacturing and food and beverage sectors.
In addition to being acquisitive, XPO has also opened up seven new licensed brokers in 2012 that provide trucking services to various retailers. The firm has a total of 33 company-owned locations and 23 agencies.
In August, XPO announced that its total revenue for the second quarter in 2012 was $54.5 million, a 23.7 percent increase from the same period in 2011, but took a loss of $3.7 million in Ebitda. The company’s third quarter financial results are slated to be announced on Nov. 6.
XPO’s market cap currently hovers $229.8 million.