XPO Logistics looks to sell business segments

Following several challenging quarters for Connecticut-based XPO Logistics, CEO Brad Jacobs said the logistics company will look to sell or spin off up to four of its business segments.

The business segments under consideration for sale include XPO’s North American and European transportation and logistics divisions, Jacobs told Jim Cramer during a CNBC Mad Money segment. However, XPO doesn’t plan to sell its entire business or its North American Less-Than-Truckload (LTL) segment. LTL was a particularly strong performer among XPO’s business segments in 2019.

The sell-off strategy is planned to address management concerns that XPO’s current business is undervalued as a diversified business, Jacobs said. He added that selling off or spinning out the segments into pure-play companies would increase the valuation of the individual segments.

Regarding the larger logistics outlook, Jacobs added that he’s “sensing a bottom,” that the industrial economy is still not very robust but seems to no longer be on the decline, and that consumer and retail demand is strong.