XPO Logistics announced that it has entered into definitive agreements with a group of global institutional investors to raise a total of $1.26bn of equity. The company will receive all of the net proceeds and will use them to fund its ongoing growth strategy.
The group of investors includes Ontario Teachers’ Pension Plan; GIC, Singapore’s sovereign wealth fund; and Public Sector Pension Investment Board, which collectively made an initial investment of $700m in the company in September 2014. These three investors each increased their holdings in XPO with the new private placement and were joined by 12 institutional investors, including sovereign and university endowment funds.
The company intends to use the net proceeds, together with cash on hand and the debt financing, to fund its pending purchase of Norbert Dentressangle SA and for other unspecified acquisitions. There are no selling shareholders.
The transaction, which is complete and scheduled to settle this week, provides for the sale of newly issued common stock and preferred stock to the investors at a price of $45 per share of common stock on an as-converted basis. Upon approval by the company’s shareholders, the preferred stock will be converted into common stock. The stock issuance represents 28m shares, or approximately 21% of XPO’s common stock on a fully diluted basis, assuming conversion of the preferred stock. Bradley Jacobs and Jacobs Private Equity, LLC intend to vote in favour of the stock issuance. Jacobs Private Equity, LLC will remain the company’s largest shareholder.
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