The Government of Singapore Investment Corp, Singapore’s sovereign fund, is joining Canada’s PSP Investments and Ontario Teachers’ Pension Plan in together investing US$700 million in XPO Logistics Inc (NYSE: XPO), the U.S. company said, adding that it plans to use the proceeds for unspecified acquisitions.
In a statement released in the United States, XPO said the deal will be carried out through the sale of newly issued common stock and preferred stock to the investors, which will hold about 22 percent of XPO after conversion.
Greenwich, Connecticut-based XPO, a provider of freight transportation services, has a market value of US$1.8 billion.
GIC itself is investing US$250 million and will have a 7.5 percent stake, a person familiar with the matter said. In the statement, Lim Kee Chong, GIC’s deputy group chief investment officer, described XPO as set to become “one of the long-term winners in the industry.”
U.S. private equity firm Jacobs Private Equity, which is led by American businessman Bradley Jacobs, will remain the company’s largest shareholder following the transaction’s completion on Sept. 17. Jacobs became the company’s CEO when his firm invested in XPO in September 2011.
Michael Wissell, a senior vice president at Ontario Teachers’, said, “Teachers’ believes in partnering with world-class entrepreneurs. We are pleased to invest alongside Brad Jacobs and his team. Their plans for XPO align with our approach to long-term value creation.”
Daniel Garant, a senior executive at PSP, said, “We are pleased to become a meaningful shareholder of XPO and support its board and management as it pursues its growth strategy.”
PSP Investments is one of Canada’s largest pension fund managers, investing assets on behalf of federal government employees, while Ontario Teachers is the largest single-profession pension plan in Canada.
(Reporting by Saeed Azhar and Aradhana Aravindan; Editing by Kenneth Maxwell)
(This story has been edited by Kirk Falconer, editor of peHUB Canada)
Photo courtesy of Shutterstock