XPO Logistics will now focus solely on trucking, as it spins off and sells its other businesses.

• XPO Logistics intends to divest its high-tech truck brokerage business and focus solely on trucking, forming a separate publicly traded company.
• CNBC reported that XPO Chairman and CEO Brad Jacobs stated that the company is transforming into two great companies.
• The ticker symbol XPO and headquarters in Greenwich, Connecticut will remain with the current management of the remaining trucking business.

After the closing bell on Tuesday, it will be spun off as a separate publicly traded company, leaving behind solely its high-tech truck brokerage business.

XPO Chairman and CEO Brad Jacobs stated on CNBC that the company is transforming into two great companies, with a large pool of investors interested in investing in a pure-play LTL trucking company that has an asset-based model, high return on capital, and is leveraged to the ongoing industrial recovery.

The spin-off will attract a separate universe of investors seeking an asset-light, tech-enabled truck brokerage platform.

The remaining trucking business will retain current management, including Jacobs, and will focus solely on LTL, where the company generates 33% of its revenue.

The demand for LTL trucking has increased during the global supply chain disruption caused by the Covid pandemic due to the higher cost and difficulty of finding full truckload capacity.

Since acquiring the LTL business, we have successfully managed it and generated over $3 billion in net cash, resulting in a 910 bps improvement in margin. Post-spin, the focus will be even more intense.

The truck brokerage business, which encompasses last mile delivery, freight forwarding, and managed transportation, is anticipated to commence trading under a new name by the conclusion of 2022. It will have a distinct management team, with headquarters in Charlotte, North Carolina.

XPO has an exclusive agreement with a potential buyer for its intermodal business that ships containers. If that deal does not close, the container shipping business will be included in the spinoff.

The company plans to divest its European business, which encompasses trucking, truck brokerage, and other services, either through a sale or a listing on a European exchange.

XPO's growth strategy between 2011 and 2015, which included the acquisition of LTL trucker Con-Way for $3 billion, has been departed from by Tuesday's announcement.

In August 2021, XPO spun off its contract logistics business into a separate publicly traded company called GXO. Since then, GXO's shares have gained roughly 17% in regular trading, compared to a nearly 4% decline in the S&P 500 over the same period.

"By having a management team focused on one task, they are better equipped to drive growth and become more understandable to investors as a pure-play industry leader," Jacobs stated.

XPO is the third largest LTL carrier in the U.S. by revenue, with customers including and. In 2021, XPO's North American LTL business generated more than $4.1 billion in revenue, achieving a 16% growth rate year over year.

The number of shares and their pricing for the new LTL company that XPO shareholders will receive is yet to be determined. XPO has retained Goldman Sachs, Morgan Stanley, and BofA Securities to assist with the spinoff.