(Corrects day of the week to Monday from Wednesday in last line)
By Sagarika Jaisinghani
Feb 9 (Reuters) - XPO Logistics Inc has bought home delivery company UX Specialized Logistics for $59 million in cash to tap into the booming e-commerce market in North America.
XPO estimates “last mile” delivery services, which involve transporting goods from warehouses to either a home or a retailer, to be a $13 billion market in North America.
“UX will boost our over-the-road capacity by another 1,600 independent owner-operators,” XPO Chief Executive Bradley Jacobs told Reuters. “That’s important to our growth plan for last mile.”
The deal will be announced later on Monday, Jacobs said.
New York-based UX is a third-party logistics provider specializing in inventory management services and the installation of heavy goods apart from home delivery on the east coast and in Chicago and Canada.
XPO is the largest non-asset provider of last mile-delivery services for heavy goods in the region.
Jacobs, 58, has built Greenwich, Connecticut-based XPO into a one-stop shop logistics company since he took control in 2011, largely through acquisitions.
The UX deal will significantly boost XPO’s exposure to burgeoning U.S. e-commerce sales, which are expected to nearly double to $434.2 billion in 2017 from 2012, according to statistics website Statista.
UX, founded in 1978 and formerly known as Urban Express, delivers over 930,000 packages annually. The company had revenue of $113.2 million in 2014.
The deal is expected to immediately add to XPO’s earnings, Jacobs said, adding that almost all of the UX management team has joined XPO.
Analysts on average expect XPO’s loss to narrow to 10 cents per share for the first quarter ending March 31 from 37 cents a year earlier, according to Thomson Reuters I/B/E/S. Revenue is expected to triple to $849.7 million.
XPO had cash and equivalents of $680.1 million as of Sept. 30. The company raised $700 million in September from a group of investors including Ontario Teachers’ Pension Plan and Singapore’s sovereign fund, GIC, to spend on acquisitions.
XPO’s stock has risen about 51 percent in the past 52 weeks and has vastly outperformed that of rival Expeditors International of Washington Inc, which has gained 9 percent. UTi Worldwide Inc’s shares have fallen 20 percent.
XPO’s stock closed at $40.86 on the New York Stock Exchange on Monday. (Editing by Saumyadeb Chakrabarty and Joyjeet Das)