Topic: How To Invest

Spinoffs & Takeovers Hotline – Friday, July 5, 2024

Article Excerpt

RXO INC., $26.77, symbol RXO on New York, is a provider of brokered transportation services in Canada and the U.S. The company offers tech-enabled truck brokerage services together with complementary solutions including managed transportation, freight forwarding and last mile delivery. RXO operates an “asset light” business model. That’s where its truck brokerage business operates as an intermediary between shippers and carriers (truck and fleet owners), connecting truckload supply and demand—it doesn’t own any trucks itself. On November 1, 2022, the company was spun off from XPO Inc. (symbol XPO on New York, and formerly known as XPO Logistics). On June 23, 2024, RXO announced it had acquired Coyote Logistics, an asset-light freight broker owned by United Parcel Service (symbol UPS on New York). RXO is paying $1.03 billion for the business. Coyote generated $3.2 billion in revenue in 2023. To help pay for Coyote, two of RXO’s largest shareholders: MFN Partners and Orbis Investments, will invest an additional $300 million and $250 million, respectively, in…