Clipper Logistics is set to recommend a cash and stock offer of GXO to its shareholders, subject to customary due diligence and agreement on detailed terms and conditions.
GXO’s cash and stock offer for the e-processing company is valued at around $1.3 billion, according to The Loadstar Premium.
The deal consists of 690p ($9.38) per share in cash and new GXO shares which “would imply a valuation of 230 pence [per share] based on GXO’s three-month volume-weighted average price and a three-month average US$/pound sterling exchange rate, calculated in each case for the period ending on the last practicable date before any announcement firm offer”.
However, the offer comes with a warning to Clipper shareholders that its total value at current exchange rate levels may differ “at the time of the announcement of a firm offer”.
Nonetheless, GXO Chief Strategy Officer Neil Sheldon was optimistic about the possible deal and said The Loadstar this would allow the company to enter the life sciences sector, providing things like lateral flow testing directly to consumers.
Additionally, the deal would add to the company’s geographic reach, expanding its markets to Poland and Germany.
GXO’s vertical integration into the life sciences sector would follow last year’s acquisition of the UK operations of Kuehne + Nagel, which gave the company access to the telecommunications industry.
In the six months ending October 31, 68% of Clipper’s logistics revenue was generated by online fulfillment and returns management businesses. Clipper has expanded its specialist services, including electronics repair capability, through its acquisition of Dutch company CE Repair, announced in November.
In addition to its presence in the UK, Poland and Germany, Clipper has growing operations in the Republic of Ireland, the Netherlands and Belgium.