XPO Logistics To Buy Pacer International In $335 Mln Deal

(RTTNews) - XPO Logistics Inc. (XPO) said Monday that it agreed to acquire Pacer International Inc. (PACR), the third largest provider of intermodal transportation services in North America, in a deal valued at $335 million.

As per the terms of the proposed transaction, shareholders of Pacer will receive $6.00 in cash and $3.00 of XPO Logistics common stock for each share of Pacer common stock, subject to a price collar, for a total market value of $335 million and a total enterprise value of $296 million.

As of January 3, 2014, the consideration represents a premium of approximately 8 percent compared to the closing price of Pacer common stock on January 3, 2014.

The transaction is expected to close in the second quarter of 2014, subject to regulatory clearance, Pacer shareholder approval and other customary conditions. Pacer's board of directors unanimously approved the transaction.

XPO Logistics said that the combined company will continue to trade on the New York Stock Exchange under the symbol XPO.

Pacer, founded in 1997, facilitates approximately 10 percent of all domestic intermodal freight movements, and is the largest provider of intermodal services between the U.S. and Mexico. For the trailing 12 months ended November 30, 2013, Pacer generated total revenue of $1.0 billion, with 30 locations and approximately 950 employees.

XPO Logistics noted that Bradley Jacobs, chairman and chief executive of XPO Logistics, will retain these positions and lead the combined company.

Daniel Avramovich, chief executive officer of Pacer, and substantially all of Pacer's executives have agreed to continue to lead the operations for XPO. Avramovich, a 36-year transportation industry veteran, will serve as chief executive officer of a newly created XPO unit, which will retain its Dublin, Ohio, operations center.

The company said it has obtained a commitment from Credit Suisse AG for up to $325 million in senior secured term loan facilities to fund the Pacer transaction and general corporate purposes, including potential future acquisitions. The transaction is not conditioned on financing.

After closing, XPO Logistics expects to have about 3,200 employees at 124 locations facilitating more than 22,000 freight movements a day.