|Company Name:||XPO Logistics, Inc|
|Event Title:||XPO Logistics Inc to Acquire Pacer International Transcript|
|Event Time:||08:30 AM ET|
Welcome to the XPO Logistics and Pacer International Investor's Conference Call and Webcast. My name is Cliff and I'll be your operator for today's call. At this time all participants are in the listen-only mode. Later we will conduct a question-and-answer session. Please note that this conference is being recorded. Before the call begins, let me read a brief statement on behalf of a company regarding forward-looking statements.
During this call the company will be making certain forward-looking statements within the meaning of applicable security laws which by their nature involve a number of risks, uncertainties and other factors that could cause the actual results to differ materially from those projected in the forward-looking statements.
A discussion of factors that could cause actual results to differ materially is contained in the SEC's filings with XPO and Pacer. The forward-looking statements in the press release are made in this call are made as of today and the companies have no obligation to update any of these forward-looking statements which include, including our outlook except to the extent required by law. You can find the copy of the press release which contains additional important information regarding forward-looking statements in the Investors section on XPO's website at www.xpologistics.com and www.pacer.com. I'd now like to turn the call over to Mr. Brad Jacobs. Mr. Jacobs, you may begin.
Bradley S. Jacobs
Chief Executive Officer and Chairman
Thank youoperator, good morning everybody. Thanks for joining us on this Monday morning beginning of the year to talk about the very important news that we announced. With me on the call today are John Hardig, our CFO; Scott Malat, our Chief Strategy Officer; Gordon Devens, our General Counsel and Tavio Headley, our Director of IR. I am also very pleased that Dan Avramovich is with us, the Chairman and CEO of Pacer International and John Hafferty, Pacer's CFO. So we are very pleased. to have announce this morning our agreement to buy Pacer in a cash and stock transaction for the market value of $335 million.
After we give you some color on the transaction we used the bulk of the call to answer your questions. Most of our investors are familiar with Pacer, it's been traded on NASDAQ since 2002. But for those of you who are generalist let me explain why we are excited about buying Pacer as well as the larger intermodal opportunity. We're bullish about this acquisition for a lot of reasons but four them in particular.
One the intermodal sector is one of the fastest growing areas in transportation. Two, Pacer is the third largest provider of intermodal services in North America . Three, Pacer is the largest provider of intermodal services in cross-border Mexico which is benefiting from strong growth trends. And four very importantly the combination will create substantial cross selling opportunities for us company wide and enhance our value to customers .
So inter modal in North America is about a $15 billion sector and has been growing at three to five times GDP and Pacer is the third largest player in this fast growing space. Pacer facilitates approximately 10% of all domestic intermodal freight movements. Within the broader intermodal opportunity, cross border Mexico freight movements are on the rise driven by near shoring by manufacturers.
Pace's expertise will give us a strong position here. We have a major opportunity by merging our salesforces. Intermodal is something that our customers have been asking for once the deal closes we'll market intermodal actively to the thousands of small and mid size shippers in our customer base.
We'll also be able to cross sell the Pacer's customers . Many intermodal shippers need truckload, LTL, expedite, last-mile, managed transportation, freight forwarding all of which we can provide some of which Pacer provides itself now, we can augment that. When we ask customers what they want we most often hear that they want flawless on time pick up in deliveries.
And they want a capacity provider with a broad range of services to handle their entire supply chain. Large shippers in particular frequently tell us that they are winnowing down their supply chain relationships to fewer larger providers. We positioned XPO to be one of these full service providers of choice and the acquisition of Pacer is right inline with this strategy. Now, I am going to ask Dan to give you some more color.
Dan W. Avramovich
Chairman, Chief Executive Officer and President, Pacer International
Thanks, Brad. We're confident that this transaction is a win-win for all of our stakeholders. After conducting a thorough process of evaluation and considering a broad range of strategic alternative.
Our Board determined that this transaction is in the best interest of our shareholders. Pacer shareholders will receive immediate cash value for their investment in Pacer while also having the opportunity to participate in the upside potential of the combined company. XPO is a proven leader in the industry with a track record of strong performance as one of the fastest growing providers of transportation logistics services in North America . In XPO, we found a partner that has great respect for our company, recognizes the value of the Pacer employees and shares our confidence about our business.