O’Melveny Represents GIC, Singapore's Sovereign Wealth Fund, in Definitive Agreement for a US$700 Million Investment in XPO LogisticsSeptember 11, 2014 FOR IMMEDIATE RELEASE
O’Melveny & Myers LLP
SINGAPORE AND SILICON VALLEY -- September 11, 2014 -- O’Melveny & Myers LLP represented GIC, Singapore’s sovereign wealth fund, in a definitive agreement to invest US$700 million, along with PSP Investments and Ontario Teachers’ Pension Plan, in XPO Logistics. The transaction is scheduled to close on September 17, 2014.
The O’Melveny team was led by partner David Makarechian and counsel Nima Amini, with assistance from counsel Ruchun Ji and associate Christopher Brannan.
O’Melveny & Myers LLP
With approximately 750 lawyers in 16 offices worldwide, O’Melveny & Myers LLP helps industry leaders across a broad array of sectors manage the complex challenges of succeeding in the global economy. We are a values-driven law firm, guided by the principles of excellence, leadership, and citizenship. Our commitment to these values is reflected in our dedication to improving access to justice through pro bono work and championing initiatives that increase the diversity of the legal profession. For more information, please visit www.omm.com.
The following press release was issued by XPO Logistics:
PSP Investments, GIC and Ontario Teachers’ Pension Plan Agree to Invest $700 Million in XPO Logistics
GREENWICH, Conn. — September 11, 2014 — XPO Logistics, Inc. (NYSE: XPO) (the “company”) today announced that it has entered into a definitive agreement with PSP Investments, GIC, Singapore's sovereign wealth fund, and Ontario Teachers' Pension Plan (the “Investors”) to invest a total of $700 million in XPO to accelerate the company’s growth strategy. The company will receive all of the net proceeds, which it intends to use primarily for unspecified acquisitions. There are no selling shareholders.
The transaction, which is complete and scheduled to settle on September 17, 2014, provides for the sale of newly issued common stock and preferred stock to the Investors. Upon approval by the company's shareholders, the preferred stock will be converted into common stock and the Investors will hold approximately 22% of XPO's common stock on a fully diluted basis. The $30.66 price per share of common stock issuable to the Investors represents a 5% discount to the trailing 20-day volume weighted average price. Bradley Jacobs and Jacobs Private Equity, LLC intend to vote in favor of the stock issuance. Jacobs Private Equity, LLC will remain the company's largest shareholder.
The company further announced that, In light of this transaction and the expected acceleration of its growth plans, it has raised its 2017 financial targets to approximately $9 billion of revenue and $575 million of EBITDA, up from previous targets of $7.5 billion and $425 million, respectively.
Bradley Jacobs, chairman and chief executive officer of XPO Logistics, said, “We’re delighted to welcome PSP Investments, GIC and Ontario Teachers’ Pension Plan as significant shareholders in XPO. This strategic investment by three blue chip institutions is a strong endorsement of our plan for value creation. With the benefit of $700 million of additional equity to accelerate our growth, we can capitalize on an acquisition pipeline that’s livelier than expected. We’re now targeting approximately $9 billion of revenue and $575 million of EBITDA for 2017.”
Daniel Garant, senior vice-president, public markets for PSP Investments, said, "We are pleased to become a meaningful shareholder of XPO and support its board and management as it pursues its growth strategy. This investment in XPO is consistent with our Value Opportunities Portfolio's mandate, which includes making strategic investments in publicly-listed companies that we believe have the capability of generating above average risk-adjusted returns over time and where PSP Investments can leverage its permanent and growing capital base over a long-term investment horizon."
Lee Kee Chong, deputy group chief investment officer and director of integrated strategies for GIC, said, "We have a favorable view on the U.S. economy and on the U.S. logistics industry, and are excited to partner with Brad and the team at XPO. We are confident that XPO’s strong management team and sophisticated technology platform will enable XPO to become one of the long-term winners in the industry.”
Michael Wissell, senior vice-president, public equities for Ontario Teachers' Pension Plan, said, "Teachers' believes in partnering with world-class entrepreneurs. We are pleased to invest alongside Brad Jacobs and his team. Their plans for XPO align with our approach to long-term value creation.”
For a summary of other material terms relating to the investment, see the company’s filings with the Securities and Exchange Commission. These can be accessed on the websites www.sec.gov and www.xpo.com.
Morgan Stanley & Co. LLC is serving as placement agent for the transaction.
About XPO Logistics, Inc.
XPO Logistics, Inc. (NYSE: XPO) facilitates more than 31,000 deliveries a day as one of the fastest growing providers of transportation logistics services in North America. XPO is the fourth largest freight brokerage firm, the third largest provider of intermodal services, the largest provider of last mile logistics for heavy goods, the largest manager of expedited shipments, and the leading provider of highly engineered, technology-enabled contract logistics. Additionally, the company has growing positions in managed transportation, global freight forwarding and less-than-truckload brokerage.
XPO has 203 locations and approximately 10,400 employees. Its three business segments – freight brokerage, expedited transportation and freight forwarding – utilize relationships with ground, rail, sea and air carriers to serve over 14,000 customers in the manufacturing, industrial, retail, commercial, life sciences and governmental sectors. The company has more than 3,600 trucks under contract to its drayage, expedited and last mile subsidiaries, and has access to additional capacity through its relationships with over 27,000 other carriers. For more information: www.xpo.com.
About PSP Investments
The Public Sector Pension Investment Board (PSP Investments) is one of Canada's largest pension investment managers with $93.7 billion of net assets under management as of March 31, 2014. Its highly-skilled and dedicated team of professionals manages a diversified global portfolio including public equities, private equity, bonds and other fixed-income securities, real estate, infrastructure and renewable resources. PSP Investments is a Crown corporation established to manage employer and employee net contributions since April 1, 2000, to the pension funds of the federal Public Service, the Canadian Forces and the Royal Canadian Mounted Police, and since March 1, 2007, of the Reserve Force. PSP Investments' head office is located in Ottawa, Ontario, and its principal business office is in Montréal, Québec. For more information: www.investpsp.ca.
GIC is a leading global investment firm with well over $100 billion in assets under management. Established in 1981, the firm manages Singapore’s foreign reserves and is uniquely positioned for long-term and flexible investments across a wide range of asset classes, including real estate, private equity, equities and fixed income. GIC has investments in over 40 countries and has been investing in emerging markets for more than two decades. Headquartered in Singapore, GIC employs over 1,200 people across 10 offices in key financial cities worldwide. For more information: www.gic.com.sg.
About Ontario Teachers' Pension Plan
With over $140 billion in net assets as of December 31, 2013, the Ontario Teachers' Pension Plan is the largest single-profession plan in Canada. An independent organization, it invests the pension fund's assets and administers the defined benefit pensions of 307,000 active and retired teachers in Ontario. For more information: www.otpp.com.