January 6, 2014 11:00 AM, EST
XPO to Buy Pacer for $335 Million
Sean Lamb/Wikimedia

XPO Logistics Inc. said it will acquire intermodal freight carrier Pacer International Inc. in a transaction valued at $335 million.

The purchase will double XPO’s expected annual revenue to $2 billion, the companies said in a Jan. 6 statement.

“We’ve viewed Pacer as a valuable acquisition candidate for quite a while. This transaction will make us the third largest North American provider of intermodal services, one of the fastest-growing areas of transportation logistics,” Bradley Jacobs, chairman and CEO of XPO, said in the statement.  “We expect this transaction to be significantly and immediately accretive to our earnings and accelerate our growth company-wide.”

Jacobs will retain his position in the new company, which will still be known as XPO. Daniel Avramovich, chairman and CEO of Pacer, will continue to lead Pacer’s operations, which will become a new unit of XPO. Most of Pacer’s executives will remain, the companies said.

“After a comprehensive exploration of strategic alternatives, we are confident that a combination with XPO maximizes value for Pacer shareholders,” Avramovich said. “We will be introducing intermodal to thousands of new customers through the XPO Logistics network, and we look forward to working closely with XPO to ensure a seamless integration.”

The deal is subject to regulatory clearance and approval by Pacer’s shareholders, the companies said. They expect the transaction to close in the second quarter of this year.

The purchase would be the 11th acquisition for XPO, the Wall Street Journal reported. Most recently, XPO acquired Optima Service Solutions, a last-mile delivery provider for retailers and manufacturers, for $26.6 million.

XPO, based in Greenwich, Conn., ranks No. 45 on the Transport Topics Logistics Top 50 list of the largest logistics companies in the North America. Pacer, based in Dublin, Ohio, is the third largest provider of intermodal freight services in North America, and the largest intermodal provider for movements between the United States and Mexico, Pacer said.