Trucking firm XPO to buy bankrupt Yellow's service centers for $870 mln
Business
Trucking firm XPO to buy bankrupt Yellow's service centers for $870 mln
(Reuters) - Trucking company XPO Inc (XPO.N) won a bid to buy 28 service centers of bankrupt Yellow Corp for $870 million in a closely watched auction of the nearly 100-year-old firm's assets.
XPO shares were down 3.8% in morning trade amid weakness in broader markets.
Yellow, formerly known as YRC, filed for Chapter 11 bankruptcy protection in August after blaming the International Brotherhood of Teamsters union for its demise.
The company was one of the nation's largest so-called less-than-truckload carriers in the U.S. and owned about 12,000 trucks and 35,000 trailers and its customers included Walmart (WMT.N) and Home Depot (HD.N).
XPO expects the deal, which is subject to court approval, to add to core profit in 2024 and adjusted profit per share from continuing operations from 2025, according to a filing on Tuesday.
The deal will add "significant footprint in areas where XPO was previously capacity constrained, the path towards the company's 2027 goals," said Jonathan Chappell, analyst at Evercore ISI.
The company has also entered into an $870 million credit agreement which it may use to finance a deal it said would help optimize routes for its less-than-truckload transportation in North America.
XPO's successful bid was part of a court-supervised auction that saw nearly two dozen companies, including Estes Express Lines and Knight-Swift Transportation Holdings (KNX.N), win rights to purchase Yellow's assets for $1.88 billion, as per a court filing on Monday.
