XPO Logistics Inc., a nonasset-based third-party logistics provider, said today it had acquired East Coast Air Charter Inc., a Statesville, N.C.-based air cargo charter broker, in a $9.25 million all-cash deal.
The transaction expands Greenwich, Conn.-based XPO's foothold in the expedited transportation market, which is one of the company's three business segments. XPO's expedited unit, Express-One, has been doing business with East Coast Air for some time, according to Bradley S. Jacobs, XPO's chairman and CEO. William McBane, East Coast Air's owner, will lead the operation from Statesville, XPO said in a statement.
As an air charter broker, East Coast Air procures cargo charter services for companies across multiple industries that need rapid, time-definite transportation of unplanned and time-critical material. Jacobs said XPO will leverage East Coast Air's capabilities to expand into the just-in-time delivery segment both within the United States and in the U.S.-Mexico market.
East Coast had 2012 revenues of about $43 million. Jacobs said in an interview with DC Velocity that XPO could grow the business segment to as much as $150 million per year. XPO will target the automotive, pharmaceutical, defense, and energy industries with the offering, Jacobs said.
The acquisition is another step in Jacobs' ongoing strategy to rapidly grow XPO through a mix of acquisitions and organic expansion into specific locations that Jacobs refers to as "cold starts." In the past 14 months, XPO has made five acquisitions and launched 17 cold starts. Of the cold starts, eight locations have focused on truck brokerage, eight on freight forwarding, and one on expedited transportation, Jacobs said.
The company's focus is on truck brokerage, a $50 billion a year business that is highly fragmented. Jacobs said XPO has about 1 percent of the market and believes there is significant market share for the taking.
The company will release its fourth quarter 2012 results on Feb. 27.