GXO Plans to Buy Clipper for About $1.3 Billion

A GXO Logistics warehouse
A GXO Logistics warehouse. (GXO Logistics)

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GXO Logistics has reached agreement with Clipper Logistics on the key terms of a possible acquisition, both company boards announced Feb. 20.

Clipper Logistics, based in the United Kingdom, specializes in logistics for many European retailers. GXO has not yet made a formal offer, but the agreed-upon terms indicate a purchasing price that is estimated to be $1.3 billion.

“Our two companies have highly complementary service offerings, customer portfolios and footprints in the UK and Europe, and we are natural partners with a very strong cultural fit,” GXO CEO Malcolm Wilson said in a statement provided to Transport Topics. “We believe we can achieve very significant productivity opportunities by taking advantage of technology and infrastructure overlap in the joint enterprise.”


GXO is a contract logistics company based in Greenwich, Conn. XPO Logistics helped start the company Aug. 2 when it split its logistics operations into a stand-alone company to take advantage of tailwinds related to e-commerce, automation and outsourcing. GXO sees the acquisition as enhancing its position as an innovative and well-capitalized company in the pure-play logistics space.

Both companies called the potential deal a combination that would significantly increase opportunities in e-commerce and e-fulfillment. This compatibility, the companies said, would enable significant cross-selling of capabilities across a large combined customer base.

Clipper also would bring unique expertise. That includes technology, repairs expertise, new e-fulfillment customers and a vertical presence in life sciences. GXO, which would gain a geographic presence in Germany and Poland, would offer a cash-and-share deal to acquire each ordinary share from Clipper.

Based on the terms, the offer would be on an exchange ratio defined by 690 pence in cash and new GXO shares equal to 230 pence based on a trailing three-month volume weighted average price. The offer implies a total valuation of 920 pence per ordinary share. Clipper is therefore being valued at $1.33 billion.

Deutsche Bank Research estimates $1 billion will be paid with cash and assumed debt with $330 million being paid in new GXO equity. It also says the deal is about $4 accretive to the GXO share price on a pro forma synergy basis.

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“We expect cost synergies to be significant given GXO’s already massive scale in the U.K. and limited customer overlap with Clipper,” Amit Mehrotra, a research analyst at Deutsche Bank, wrote in a report. “For example, assuming the same level of synergy that GXO achieved in its Kuehne Nagel UK acquisition last year (5% of revenue), we estimate GXO is paying 10.2 times Clipper’s pro forma calendar 2022 EBITDA, which is about 25% discount to GXO’s current multiple.”

The companies reaching an agreement does not constitute a formal offer. Vertical Research Partners noted GXO will have until March 20 to make a formal offer based on U.K. securities laws.

Clipper’s board of directors had indicated it would unanimously recommend a deal to shareholders should a firm offer be made. In addition to that, any offer made by GXO remains subject to the satisfaction or waiver on a number of customary pre-conditions.

XPO Logistics ranks No. 2 on the Transport Topics Top 50 list of the largest logistics companies in North America and No. 3 on the TT Top 100 list of the largest for-hire carriers.