European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/gxo-logistics-inc" target="_blank" data-smartkarma-citation="entities:35654:1" rel="noopener">GXO Logistics (GXO US)</a> offers 605p for <a href="https://www.smartkarma.com/entities/wincanton-plc" target="_blank" data-smartkarma-citation="entities:23839:1" rel="noopener">Wincanton PLC (WIN LN)</a>, in a strategic move worth a 104% premium, 8.6x EV/25e EBITDA, 18.2 Fwd P/E (IBES), via scheme with 34% irrevocables.</li>
<li>Regulators are used to monitoring this industry, gradually consolidating on a worldwide scale as a result of cost pressures. GXO has smaller scale in the UK. </li>
<li>I don't think antitrust issues are going to prevent this transaction. Interloper risk is minimal (DHL, Deutsche Post would have regulatory issues). Spread is 1.00%/7.14% (gross/annualised). Long.</li>
</ul>



GXO Logistics (GXO US) offers 605p for Wincanton PLC (WIN LN), in a strategic move worth a 104% premium, 8.6x EV/25e EBITDA, 18.2 Fwd P/E (IBES), via scheme with 34% irrevocables.
Regulators are used to monitoring this industry, gradually consolidating on a worldwide scale as a result of cost pressures. GXO has smaller scale in the UK. 
I don't think antitrust issues are going to prevent this transaction. Interloper risk is minimal (DHL, Deutsche Post would have regulatory issues). Spread is 1.00%/7.14% (gross/annualised). Long.


<ul>
<li>Consideration is 690p + 0.0359 new GXO shares, an implied equity value of £961 million. Multiples are 12.8x EV/Fwd EBITDA (vs. a median 11.3x for comparable M&amp;A transactions) and 33.3x Fwd P/E.</li>
<li>My TP for Clipper is 857p (DCF, WACC 9.5%, 9.0x 5y EBITDA exit, 1% perpetuity growth rate). The offer price seems fair, with 40% of synergies accruing to Clipper shareholders. </li>
<li>This is a friendly deal with a compelling 49% premium. Considering GXO's M&amp;A experience, the merger should be successful. The spread (as of 28 February closing share prices) is 2.7%.</li>
</ul>


Consideration is 690p + 0.0359 new GXO shares, an implied equity value of £961 million. Multiples are 12.8x EV/Fwd EBITDA (vs. a median 11.3x for comparable M&amp;A transactions) and 33.3x Fwd P/E.
My TP for Clipper is 857p (DCF, WACC 9.5%, 9.0x 5y EBITDA exit, 1% perpetuity growth rate). The offer price seems fair, with 40% of synergies accruing to Clipper shareholders. 
This is a friendly deal with a compelling 49% premium. Considering GXO's M&amp;A experience, the merger should be successful. The spread (as of 28 February closing share prices) is 2.7%.


GXO Logistics/Clipper Logistics: Recommended Cash & Stock Offer

United States

GXO Logistics, Inc. operates as a contract logistics provider. The Company solves complex logistics challenges for its blue-chip customers with technologically advanced supply chain solutions, at scale, with speed. GXO Logistics serves clients worldwide.

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GXO Logistics (GXO US)

GXO/Wincanton: Scheme Document

GXO Logistics offers 605p for Wincanton PLC, a strategic move with a 104% premium and minimal antitrust concerns, amidst industry consolidation.

Jesus Rodriguez Aguilar

GXO Logistics/Clipper Logistics: Recommended Cash & Stock Offer

This is a friendly offer with a compelling premium, likely to close. Considering GXO's deal experience, the merger should be successful. Gross...

Jesus Rodriguez Aguilar

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

GXO/Wincanton: Scheme Document

​GXO Logistics offers 605p for Wincanton PLC, a strategic move with a 104% premium and minimal antitrust concerns, amidst industry consolidation.

Jesus Rodriguez Aguilar

GXO Logistics/Clipper Logistics: Recommended Cash & Stock Offer

This is a friendly offer with a compelling premium, likely to close. Considering GXO's deal experience, the merger should be successful. Gross...

Jesus Rodriguez Aguilar

GXO Logistics offers 605p for Wincanton PLC, a strategic move with a 104% premium and minimal antitrust concerns, amidst industry consolidation.