C.H. Robinson, the largest 3PL in the United States, is set to expand significantly through the acquisition of RXO, in a deal that combines cash and shares and brings together two major players in the third-party logistics sector.
The transaction was announced Monday morning, following a sharp rise in RXO’s share price on Thursday and Friday that may have hinted at the deal ahead of the official announcement.
RXO’s (NYSE: RXO) stock climbed strongly at the end of last week. On Friday alone, the shares gained $2.02, or 9.46%, to close at $23.38.
Under the terms of the transaction, RXO shareholders will receive $17.25 in cash plus 0.0856 shares of C.H. Robinson (NASDAQ: CHRW) for each RXO share they own.
Based on C.H. Robinson’s closing share price of $157.72 on Friday, the company said the consideration represents a value of $30.25 for each RXO share.
The market reaction was immediate once the agreement became public. At approximately 7:20 a.m. in pre-market trading, C.H. Robinson shares were down 4.89% at $150, a decline of $7.72. RXO, meanwhile, surged 21.86% to $28.49 per share, an increase of $5.11.
C.H. Robinson said the acquisition is designed to bring together two complementary networks while making its multimodal platform broader and stronger.
“The acquisition of RXO brings together two complementary networks and diversifies and strengthens C.H. Robinson’s multi-modal platform to accelerate its growth and increase its penetration across all modes and segments,” C.H. Robinson said in the prepared statement announcing the deal.
The company added that combining the two businesses’ trucking brokerage and managed transportation operations, alongside C.H. Robinson’s global forwarding capabilities and RXO’s strengths in expedited and last-mile services, would give customers access to a more comprehensive offering across a larger and denser network.
