XPO Logistics: Hitting Goals And Preparing For Another Acquisition

| About: XPO Logistics, (XPO)
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Back on October 30 I published an interview where I spoke with XPO Logistics (NYSEMKT:XPO) CEO Bradley Jacobs following the company's latest acquisition of Turbo Logistics. It was a deal that Jacobs called a "home run," one that doubled the company's total carriers to 20,000 and added $124 million of revenue to its top-line. In the interview we talked about the acquisition and his plans for the future. And if Jacobs' timeline is correct, then we should be seeing another acquisition in the coming weeks.

"I think we could do another acquisition by the end of the year, or we may wait until the first quarter. There's no particular magic to year-end. Given our pipeline of acquisition prospects, and the dialogues we have going, I feel comfortable saying that we should close another acquisition sometime in the next four months."

Above you can see a direct quote from the CEO of XPO Logistics, a response to a question regarding future acquisitions. Up until this point, Jacobs has been very methodical and easy to predict, as he's hit every goal that he's set. At the end of 2011 the company had revenue of $177 million, but Jacobs' goal for 2012 (after hiring his team in 2011/2012) was to open five new cold starts and add $250 million worth of acquisitions for a 2013 revenue run-rate of $500 million. As usual, like his previous ventures, Jacobs succeeded, exceeding his own bullish guidance.

Continental Freight


Turbo Logistics

Acquisition Date

May 8, 2012

August 3, 2012

October 25, 2012

Acquisition Price

$3.5 million

$8 million

$50 million


$22 million

$100 million

$124 million

As you can see, each acquisition has gotten bigger and better, as Turbo was the most recent and was also the most profitable of the three. Jacobs is yet to provide his guidance and goals for 2013/2014 but considering his goal of turning XPO into a multi-billion dollar company, the company's large cash position, and the rate at which they are acquiring, I wouldn't be surprised if a $1 billion revenue run-rate is the goal for 2014.

In the last year Jacobs has been on point with every acquisition, every goal, and has this company ready to grow by a margin that is sure to shock Wall Street. If Jacobs' trend continues of hitting all of his goals then I anticipate an acquisition soon. At the latest, this should occur by the end of February, possibly the first week of March. However, this acquisition could also occur in the next week, or even tomorrow, as Jacobs was at one time considering an acquisition before the end of last year.

The bottom line: Start watching for the acquisition, and be prepared. The stock has rallied from $12 to $17 following the company's latest acquisition, and with it being near 52-week highs, this could be the acquisition that sends XPO shooting higher long-term, clearing $20 and trending to $30.

Disclosure: I am long XPO. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.