XPO Logistics, Inc. (“XPO” or the “company”) (NYSE: XPO) announced
that RXO, Inc. (“RXO”), a wholly owned subsidiary of XPO,
has priced an offering of $355 million of notes due 2027 (the
“notes”). The notes will be issued by XPO’s wholly owned
subsidiary, XPO Escrow Sub, LLC, which will, substantially
concurrently with or prior to the consummation of the spin-off of
RXO into a separate publicly traded company, merge with and into
RXO, as a result of which the notes will become the direct
obligations of RXO. The closing of the offering of the notes
is expected to occur on or about October 25, 2022, subject to
customary closing conditions.
The notes will bear interest at a rate of 7.500%
per annum payable semiannually in cash in arrears on May 15 and
November 15 of each year, beginning May 15, 2023, and will mature
on November 15, 2027.
RXO intends to use the net proceeds from the sale
of the notes to fund a cash distribution to XPO; to pay fees, costs
and expenses incurred in connection with the spin-off, the notes
offering and related transactions; and/or to provide working
capital to RXO. The net proceeds from the notes offering will be
held in escrow until certain conditions relating to the spin-off
are satisfied.
Ravi Tulsyan, chief financial officer of XPO,
said, “We’re pleased with the successful outcome of the $355
million of notes we priced. This debt offering was an essential
step in completing the spin-off of RXO on November 1.”
The notes are being offered only to persons
reasonably believed to be qualified institutional buyers in
reliance on Rule 144A under the Securities Act of 1933, as amended
(the “Securities Act”), and only to non-U.S. persons outside the
United States pursuant to Regulation S. The notes will not be
registered under the Securities Act or any state securities laws
and may not be offered or sold in the United States absent an
effective registration statement or an applicable exemption from
registration requirements or a transaction not subject to the
registration requirements of the Securities Act or any state
securities laws.
Wachtell, Lipton, Rosen & Katz is legal
counsel to XPO and RXO in connection with the notes offering.
This press release shall not constitute an offer
to sell or the solicitation of an offer to buy any security and
shall not constitute an offer, solicitation or sale in any
jurisdiction in which such offering, solicitation or sale would be
unlawful. Any offers of the notes will be made only by means of a
private offering memorandum.
About the RXO Spin-Off
XPO intends to spin off its tech-enabled brokered
transportation platform as RXO on November 1, 2022, creating two
independent publicly traded companies. RXO will be the fourth
largest broker of full truckload freight transportation in the
United States, with a proprietary digital freight marketplace,
access to vast truckload capacity and complementary brokered
services of managed transportation, last mile and freight
forwarding.
About XPO Logistics
XPO Logistics, Inc. (NYSE: XPO) is a leading
provider of freight transportation services, primarily
less-than-truckload (LTL) and truck brokerage. XPO uses its
proprietary technology to move goods efficiently through supply
chains. The company’s global network serves 50,000 shippers with
approximately 749 locations and 43,000 employees, and is
headquartered in Greenwich, Conn., USA.
Forward-looking Statements
This release includes forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934, including
statements relating to the planned spin-off, the expected timing of
the spin-off and the anticipated benefits of the spin-off, and the
notes offering. All statements other than statements of historical
fact are, or may be deemed to be, forward-looking statements. In
some cases, forward-looking statements can be identified by the use
of forward-looking terms such as “anticipate,” “estimate,”
“believe,” “continue,” “could,” “intend,” “may,” “plan,”
“potential,” “predict,” “should,” “will,” “expect,” “objective,”
“projection,” “forecast,” “goal,” “guidance,” “outlook,” “effort,”
“target,” “trajectory” or the negative of these terms or other
comparable terms. However, the absence of these words does not mean
that the statements are not forward-looking. These forward-looking
statements are based on certain assumptions and analyses made by
the company in light of its experience and its perception of
historical trends, current conditions and expected future
developments, as well as other factors the company believes are
appropriate in the circumstances.
These forward-looking statements are subject to
known and unknown risks, uncertainties and assumptions that may
cause actual results, levels of activity, performance or
achievements to be materially different from any future results,
levels of activity, performance or achievements expressed or
implied by such forward-looking statements. Factors that might
cause or contribute to a material difference include our ability to
effect the spin-off of our tech-enabled brokered transportation
platform and meet the related conditions of the spin-off, the
expected timing of the completion of the spin-off and the terms of
the spin-off, our ability to achieve the expected benefits of the
spin-off, our ability to retain and attract key personnel for the
separate businesses, the risks discussed in our filings with the
SEC, and the following: economic conditions generally; the
severity, magnitude, duration and aftereffects of the COVID-19
pandemic, including supply chain disruptions due to plant and port
shutdowns and transportation delays, the global shortage of certain
components such as semiconductor chips, strains on production or
extraction of raw materials, cost inflation and labor and equipment
shortages, which may lower levels of service, including the
timeliness, productivity and quality of service, and government
responses to these factors; our ability to align our investments in
capital assets, including equipment, service centers and
warehouses, to our customers’ demands; our ability to implement our
cost and revenue initiatives; our ability to benefit from the
proposed spin-off; our ability to successfully integrate and
realize anticipated synergies, cost savings and profit improvement
opportunities with respect to acquired companies; goodwill
impairment, including in connection with the proposed spin-off;
matters related to our intellectual property rights; fluctuations
in currency exchange rates; fuel price and fuel surcharge changes;
natural disasters, terrorist attacks, wars or similar incidents,
including the conflict between Russia and Ukraine and increased
tensions between Taiwan and China; risks and uncertainties
regarding the potential timing and expected benefits of the
proposed spin-off of our tech-enabled brokered transportation
platform, including the risk that the spin-off may not be completed
on the terms or timeline currently contemplated, if at all; the
impact of the proposed spin-off of our tech-enabled brokered
transportation platform on the size and business diversity of our
company; the ability of the proposed spin-off of our tech-enabled
brokered transportation platform to qualify for tax-free treatment
for U.S. federal income tax purposes; our ability to develop and
implement suitable information technology systems and prevent
failures in or breaches of such systems; our indebtedness; our
ability to raise debt and equity capital; fluctuations in fixed and
floating interest rates; our ability to maintain positive
relationships with our network of third-party transportation
providers; our ability to attract and retain qualified drivers;
labor matters, including our ability to manage our subcontractors,
and risks associated with labor disputes at our customers and
efforts by labor organizations to organize our employees and
independent contractors; litigation, including litigation related
to alleged misclassification of independent contractors and
securities class actions; risks associated with our self-insured
claims; risks associated with defined benefit plans for our current
and former employees; the impact of potential sales of common stock
by our chairman; governmental regulation, including trade
compliance laws, as well as changes in international trade
policies, sanctions and tax regimes; governmental or political
actions, including the United Kingdom’s exit from the European
Union; and competition and pricing pressures.
All forward-looking statements set forth in this
release are qualified by these cautionary statements and there can
be no assurance that the actual results or developments anticipated
by us will be realized or, even if substantially realized, that
they will have the expected consequences to or effects on us or our
business or operations. Forward-looking statements set forth in
this release speak only as of the date hereof, and we do not
undertake any obligation to update forward-looking statements to
reflect subsequent events or circumstances, changes in expectations
or the occurrence of unanticipated events, except to the extent
required by law.
Investor Contacts Tavio
Headley+1-203-413-4006tavio.headley@xpo.com
Jared
Weisfeld +1-475-299-7355jared.weisfeld@rxo.com
Media ContactsJoe
Checkler+1-203-423-2098joseph.checkler@xpo.com
Nina
Reinhardt+1-980-408-1594nina.reinhardt@rxo.com
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