C.H. Robinson announced Monday it will acquire RXO in a deal valued at approximately $5.8 billion in enterprise value, combining the No. 1 and No. 3 truck brokerages in the country in the largest truck brokerage merger in history. RXO shareholders will receive $17.25 per share in cash plus roughly 0.0909 shares of C.H. Robinson stock per RXO share, or they may elect an all-cash option valued at $30.25 per share. The headline driver of the deal is $300 million in projected run-rate cost synergies, which C.H. Robinson committed to achieving within two years; at C.H. Robinson's trailing price-to-earnings ratio of 26, that implies roughly $7.8 billion in value, more than the $5.8 billion enterprise price tag. RXO had posted ten consecutive quarters of net losses and its stock had fallen below $11 as recently as last November, while C.H. Robinson, under CEO Dave Bozeman, holds an investment-grade credit rating approximately two notches above the cutoff at both Moody's and S&P, and ratings agencies indicated the combined entity would maintain that rating. RXO shares surged more than 16% in the days before the official announcement, a move that coincided with a short interest position equal to roughly 10% of the company's float.
CH Robinson Worldwide IncC.H. Robinson is acquiring RXO for ~$5.8B with $300M projected cost synergies, a major M&A event for the company.
RXO Inc.RXO is being acquired at $17.25 cash plus stock or $30.25 all-cash per share, a premium to its depressed price.
United Parcel Service Inc