According to a published story that was independently validated, XPO Logistics Inc. is considering selling its North American freight forwarding operation in a transaction for $400 million to $600 million.
Bloomberg broke the story late on Friday. FreightWaves later acquired confirmation from sources close to the situation.
The freight forwarding division is one of four assets that XPO (NYSE: XPO) intends to spin off as a separate company in the fourth quarter. The truck brokerage division of XPO is the most visible and profitable of the four. The others, in addition to freight forwarding, are final mile and controlled transportation.
The separation, together with the future sale or listing of its European company and the sale of its North American intermodal unit to STG Logistics for $710 million in cash in late March, will leave XPO as a pure-play LTL carrier. It spun off its logistics company last summer, forming GXO Logistics Inc. (NYSE: GXO)
XPO does not disclose financial data for its freight forwarding division. In the first quarter, the freight forwarding and managed transportation businesses earned $551 million in revenue. The two companies’ aggregate margin was $166 million. XPO defines margin as gross revenue less transportation and service costs, excluding depreciation and amortization.
The combined margin for XPO’s LTL and brokerage divisions was $594 million, or almost 60% of the company’s total margin of $1.03 billion.
