XPO Logistics Inc. agreed to acquire European counterpart Norbert Dentressangle SA in a deal valued at $3.53 billion including debt, as it seeks to become one of the largest providers of supply-chain services in the world.
Founder Norbert Dentressangle will sell his family’s 67 percent ownership in the Lyon, France-based company for 217.50 euros per share, according to XPO. XPO, based in Greenwich, Connecticut, will then start a tender offer for the remaining stake at the same price. That reflects a 37 percent premium to Norbert’s closing price Tuesday in Paris of 159.10 euros a share, and a value of more than $2 billion in cash.
This is the largest deal ever for XPO Chief Executive Officer Brad Jacobs, who’s made a career building companies, such as United Rentals Inc. and United Waste Systems Inc. through hundreds of acquisitions. He’s already started looking at other targets in the region to help shape XPO into a global transport-services juggernaut.
“This was a transformative acquisition for us,” said Jacobs, 58, in an interview. “It really puts us on the map in terms of critical mass, but it’s just the beginning.”
XPO jumped as much as 13 percent in afterhours trading and was trading at $47.71 as of 4:16 p.m. in New York. The shares closed regular trading at $42.45, giving the company a market value of about $3.4 billion.
Europe’s economic recovery has encouraged several U.S.- based companies to strike cross-border deals. U.S. suitors announced $201.6 billion of acquisitions of Western European companies in the past 12 months, more than twice the value of a year earlier, according to data compiled by Bloomberg. Earlier in April, FedEx Corp. agreed to buy Dutch parcel-delivery company TNT Express NV for $4.8 billion.
For XPO, the strong dollar relative to the euro made the acquisition much less expensive than it would have been in January, Jacobs said.
“Europe has had a tough last few years,” Jacobs said. “My sense of the situation is that you’re seeing the beginnings of a rebound in the Euro area.”
The Norbert acquisition will increase XPO’s pro forma revenue to about $8.5 billion, and earnings before interest, taxes, depreciation and amortization to $545 million, the company said.
Morgan Stanley is providing $2.6 billion in financing, and XPO will use $1 billion in cash. Morgan Stanley is also serving as a financial adviser to XPO, while Rothschild and JPMorgan Chase & Co. are advising Norbert.