US firm XPO Logistics is about to become a major player in the supply chain investments market - after CEO Brad Jacobs confirmed that a “record level of revenue” for the last quarter means the company has set US$8bn aside for investment deals.
Profits increased 11% in the second quarter, as the logistics giant set records for net income and revenue. Sales were up 2% to $3.76bn, and adjusted net income rocketed by nearly half, to $75mn.
Jacobs said: “The most notable growth came in last mile and contract logistics, two of the fastest-growing parts of the supply chain, where we hold leading positions in e-commerce."
Since it acquired trucking firm Con-way in 2015, XPO has refrained from participating in the mergers and acquisitions market, instead focusing on integrating the freight firm's operations into its own.
The purchase of Con-way followed hot on the back of acquisitions of intermodal service provider Pacer International and European transport and freight giant Norbert Dentressangle. Confident that its current level of growth can continue, XPO confirmed that it may be on the cusp of another spending spree, as part of its plan to become a big player in the global third party logistics market.
Jacobs added: “Even though most of our business is in North America and Western Europe, we are in 31 different countries. So some of the companies we’re looking at are multinational or multi-continent.
“We have a preference for non-asset companies, but like XPO Logistics, many of the companies that we are looking at are large companies that have both asset and non-asset businesses within them.”
The company now has a series of strategic choices available after boosting its projections for the coming years. It now expects $1.365bn in adjusted pre-tax operating earnings in 2017 and $1.6bn for 2018, which represent increases of between $15mn and $25mn for the two periods.
It begs the question now, can anything stop the current momentum of the XPO Logistics juggernaut?