Mad Money

XPO Logistics CEO is open to spinning off up to four business units

Key Points
  • XPO Logistics CEO Bradley Jacobs told CNBC the company is open to selling off up to four business units.
  • "Now, we're not interested in selling LTL — we're not marketing LTL and we're not marketing the whole company — we're marketing [these] four businesses: North American and Europe, transpiration and logistics," he said in a "Mad Money" interview.
  • "What we're doing proactively, I think, is the best way to create a significant amount of value in the stock [by] holding auctions and going through a professional process for each one of those four business units," he said.
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XPO Logistics open to spinning off up to four business units: CEO

XPO Logistics is testing the waters to unlock more value by breaking off as many as four of its business units, CEO Bradley Jacobs told CNBC Wednesday.

Wall Street is undervaluing the global logistics company and the four segments will stand better alone as smaller pure plays, he said in a "Mad Money" interview with Jim Cramer.

"Now, we're not interested in selling LTL — we're not marketing LTL and we're not marketing the whole company — we're marketing [these] four businesses: North American and Europe, transpiration and logistics," Jacobs revealed. "What we're doing proactively, I think, is the best way to create a significant amount of value in the stock [by] holding auctions and going through a professional process for each one of those four business units."

News of a potential divestiture broke after the market closed and XPO shares surged more than 15% in the aftermarket. The LTL business that Jacobs referred to is what's called less-than-truckload transporting where it's not required that the entire truck is filled in order to ship. The company also provides warehousing, last-mile delivery, intermodal and freight forwarding, among others.

Goldman Sachs and J.P. Morgan were tapped to help XPO Logistics decide its next move. Jacobs declined to answer whether any other company, such as Amazon, made a bid for the company or any of its parts.

As for how business is going, he said the industrial economy is less than robust, but added it could be bottoming.

"I don't see it being booming, but I'm sensing a bottom. It's not getting worse," Jacobs said. "The consumer part and the retail part is obviously very, very strong. Of course [e-commerce] is growing like gangbusters all across the globe and all of our businesses."

In June 2011, Jacobs and his private equity firm announced a $150 million investment into the company. The stock has since grown nearly 720% since then, closing Wednesday's session at $82.82 a share. XPO holds a market cap of $7.8 billion.

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XPO Logistics CEO is open to spinning off up to four business units

Disclosure: Cramer's charitable trust owns shares of Goldman Sachs, J.P. Morgan Chase and Amazon.

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