XPO Logistics continues its roll-up strategy with its announced acquisition of New Breed Logistics this week for $615 million. Here are some details from the press release:
New Breed had revenue of approximately $597 million and adjusted EBITDA of approximately $77 million for the trailing 12 months ended June 30, 2014.
New Breed specializes in services for omni-channel distribution, reverse logistics, transportation management, freight bill audit and payment, lean manufacturing support, aftermarket support and supply chain optimization.
New Breed’s growth is being driven by its focus on attractive customer verticals, namely technology, telecom, e-commerce, aerospace and defense, medical equipment and manufacturing.
New Breed processes over 275,000 orders per day – typically premium, high-value products – through 71 facilities, and employs approximately 6,800 people. After closing, XPO expects to have approximately 10,000 employees and more than 200 locations.
This acquisition is yet another example of the convergence taking place in the 3PL industry, as providers — through the integration of logistics services, coupled with geographic and vertical industry expansion — fend off the risk of commoditization by positioning themselves as one-stop-shop (or end-to-end) solution providers.
Side note: 3PLs have historically received a bad rap for being behind the technology curve, but in reality, some 3PLs actually have more IT people and spend more in R&D than many software companies! XPO makes reference to its IT capabilities in the press release:
Both XPO and New Breed have an intense commitment to cutting edge technology. The combination will double XPO’s IT workforce to approximately 600 talented, forward-thinking IT professionals innovating new ways to serve customers.
That said, not all 3PLs are created equal when it comes to IT. So, how can you determine if a 3PL is ahead of the curve? Read my post from February where I highlight five factors you should consider when evaluating the IT capabilities of 3PLs.