Bradley S. Jacobs

Bradley “Brad” Jacobs (born August 3, 1956 in Providence, Rhode Island) is an American businessman. He is the chairman and chief executive officer of XPO Logistics and managing director of Jacobs Private Equity LLC.[1] He is best known for having led rapid industry consolidations in waste management and equipment rental in North America, initiating in 1989 and 1997, respectively, and in global transportation and logistics since 2011.

Early life and education

Brad Jacobs was born in Providence, Rhode Island. His father was a jewelry importer.[2] He attended Northfield Mount Hermon School, Bennington College and Brown University in the 1970s, but dropped out to broker oil contracts.[2]

Career

Amerex Oil Associates, Inc.

In 1979, at the age of 23, Jacobs co-founded Amerex Oil Associates Inc., a New Jersey-based oil brokerage firm,[3][4] and served as its CEO until the firm was sold in 1983.[5]

Hamilton Resources (UK) Ltd.

In 1984, Jacobs went to England and founded Hamilton Resources (UK) Ltd., an oil trading company,[2][6] using the bulk of his savings and a $1 billion line of credit from Banque Paribas.[4] As chairman and chief operating officer, he grew the company to approximately $1 billion in annual revenue.[5] He quit the business in 1988 and moved back to the United States.[2][6]

United Waste Systems Inc.

In July 1989, Jacobs founded United Waste Systems in Greenwich, Connecticut with a strategy to consolidate small garbage collectors with overlapping routes in rural areas.[3][6] Jacobs served as chairman and CEO,[7] and in 1992 he took the company public on the NASDAQ Stock Market,[6] raising $41 million.[6] In August 1997, after having made 200 acquisitions,[2] United Waste Systems was sold to USA Waste Services Inc. for over $2 billion.[4][8] At the time of sale, United Waste Systems had become the fifth-largest solid waste management company in North America, delivering a 55% compound annual rate of return from its initial public offering to its sale to USA Waste Services.[8]

United Rentals Inc.

In September 1997, Jacobs gathered six members of his former management team from United Waste Systems around his dining room table to brainstorm about their next venture.[9][10][11] The group pooled $46.5 million of their own wealth, and raised another $8 million in private equity, to form United Rentals,[3][8] with Jacobs as chairman and CEO. As with United Waste, his plan was to grow United Rentals through a rollup strategy, consolidating small equipment rental dealers across North America.[7][9] The company began its buying spree in October 1997 with the acquisition of six small leasing outfits.[3][12]

United Rentals went public in December 1997,[11][12][13] and was traded on the New York Stock Exchange.[3] Approximately $100 million was raised in an IPO, followed by $207 million in a secondary offering.[14]

In June 1998, United Rentals acquired U.S. Rentals Inc. for a sum variously reported at $1.2 billion[15] and $1.31 billion,[16] creating the largest equipment rental company in North America.[16] By October 1999, Jacobs’ personal wealth had reportedly increased to $590 million, putting him just short of making the Forbes 400 list that year.[2]

In January 1999, affiliates of Apollo Management and United Rentals finalized a deal under which Apollo purchased $300 million in preferred stock and gained a 15% share of the company. Apollo partners Leon Black and Michael Gross joined United Rentals’ board.[17]

Jacobs utilized information technology to integrate the company’s geographically disparate rental outlets[14] and reduce the unnecessary discounting of rental rates.[9][10] Jacobs also introduced a business-to-business website where companies could research, rent and buy equipment.[3]

In September 2003, Jacobs announced that he planned to step down as CEO of United Rentals at the end of the year,[7][9][10][18] that he would continue on as executive chairman, and that he would remain the company’s largest non-institutional private shareholder.[7][9][10]

In 2004, the U.S. Securities and Exchange Commission announced it was conducting an inquiry into the accounting records of the company, related to allegedly improper accounting associated with several short-term equipment sale-leaseback transactions made from 2000 to 2002.[19] In August 2005, United Rentals terminated its president and chief financial officer, John Milne, for refusing to respond to questions from a special committee of United Rentals’ board of directors that was reviewing the SEC inquiry.[20] The matter was settled in 2008 when United Rentals agreed to pay a $14 million penalty, without admitting or denying any of the allegations.[21]

In July 2007, Jacobs signed a definitive merger agreement for United Rentals to be acquired by affiliates of Cerberus Capital Management LP for $6.6 billion, including the assumption of $2.6 billion in debt obligations.[22] The merger fell through in November of that year when Cerberus backed out of the deal due to the weakened U.S. credit market.[23][24] United Rentals sued to try to force Cerberus to complete the transaction, but in December the Delaware Court of Chancery ruled that the merger agreement allowed Cerberus to walk away as long as it paid a $100 million breakup fee.[23][24]

In August 2007, Jacobs announced that he was stepping down as chairman and director.[25]

At that point in his career, Jacobs had raised $6 billion in capital and engineered approximately 500 acquisitions,[18] including more than 250 rental companies for United Rentals.[11][26] By that time, United Rentals had become the 536th largest public corporation in America, as ranked by Fortune magazine.[27] In March 2009, Jacobs was inducted into the American Rental Association’s Hall of Fame.[11][26]

XPO Logistics, Inc

On June 14, 2011, Jacobs announced his intention to lead an investment of up to $150 million in Express-1 Expedited Solutions (now XPO Logistics, Inc.), a non-asset-based, third-party logistics transportation services provider.[4]

The investment was completed on September 2, 2011, with Jacobs assuming the roles of chairman and chief executive officer.[28][29][30] Through his investment, Jacobs gained ownership of approximately 71 percent of the company. He announced plans to move the headquarters from Michigan to Greenwich, Connecticut and to change the name to XPO Logistics, trading under the symbol XPO on the New York Stock Exchange.[31] On October 12, 2011, Jacobs rang the bell to open the Exchange.[32]

In interviews, Jacobs has stated that his entry into the truck brokerage industry was driven by his sense that the industry was ripe for consolidation due to its extreme fragmentation, with only 15 percent of trucking currently outsourced to third-party logistics brokers.[29][33] He is focused on expansion through opening of greenfield cold-start locations, as well as through acquisitions.[29][33] XPO competes directly with C. H. Robinson Worldwide, Inc. of Eden Prairie, Minnesota and Coyote Logistics of Chicago, Illinois.[34]

On July 15, 2013, the company announced that it agreed to buy 3PD, Inc., the largest provider of heavy goods, last-mile logistics in North America, for about $365 million in cash and stock, furthering its strategy for growth in transportation logistics. XPO completed the purchase on August 16, 2013.[35][36]

On March 31, 2014, XPO Logistics acquired Pacer International, the third largest provider of intermodal transportation services in North America.[37] Pacer, founded in 1997, facilitates approximately 10 percent of all domestic intermodal freight movements, and is the largest provider of intermodal services between the U.S. and Mexico.[38] On September 2, 2014, XPO Logistics acquired New Breed, a U.S. haulier.[39][40]

On September 11, 2014, XPO announced that it had entered into a definitive agreement with PSP Investments, GIC (Singapore’s sovereign wealth fund) and Ontario Teachers’ Pension Plan to invest $700 million in XPO to accelerate the company’s growth strategy.[41][42][43]

As of October 2014, XPO Logistics had 203 locations and approximately 10,400 employees facilitating over 31,000 deliveries a day throughout the United States, Mexico and Canada. The company’s three business segments – freight brokerage, expedited transportation and freight forwarding – utilize relationships with over 27,000 ground, rail, sea and air carriers to serve more than 14,000 customers in the manufacturing, industrial, retail, commercial, life sciences and governmental sectors.[44] On April 28, 2015, XPO announced a $3.56 billion (3.24 billion euros) deal to acquire major French logistics group Norbert Dentressangle.[45][46]

On June 1, 2015, XPO announced that it had entered into definitive agreements with a group of global institutional investors to raise a total of $1.26 billion of equity. The group included the original 2014 investors – Ontario Teachers' Pension Plan, GIC - Singapore's sovereign wealth fund, and PSP Investments – each of which increased its holdings in XPO and were joined by 12 institutional investors, including sovereign and university endowment funds.[47] This placement increased XPO Logistics’ total capital raised to more than $7.5 billion since September 2011.[48] On September 9, 2015, XPO announced a $3 billion deal to acquire Con-way Inc., the second-largest LTL operator nationwide. The acquisition brought additional truck capacity to XPO’s blended transportation model of brokered, owned, and contracted capacity. [49]

In North America, XPO now owns approximately 11,000 tractors and 33,000 trailers, and has access to 6,000 contracted trucks and over 38,000 brokered carriers. Globally, XPO’s network consists of 19,000 owned tractors and 46,000 owned trailers; 10,000 trucks contracted through owner-operators; and 50,000 independent carriers.[50]

XPO completed the acquisition of Con-way on October 30, 2015, gaining critical mass as a global provider with $15 billion of revenue and $1.1 billion of EBITDA and more than 84,000 employees serving over 50,000 customers through 1,469 locations in 32 countries. XPO facilitates over 150,000 deliveries a day through its transportation service range, which includes positions as the largest manager of expedited shipments in North America, the largest facilitator of heavy goods home delivery in North America, and the second largest freight brokerage firm worldwide based on net revenue, among others. Its contract logistics network is the second largest in the world based on square footage.[51]

Personal life

Jacobs is married with four children.[2]

References

  1. ↑ "Jacobs Private Equity – Management". Jpe.com. September 2, 2011. Retrieved November 11, 2011.
  2. 1 2 3 4 5 6 7 10.11.99 (October 11, 1999). "Near Misses". Forbes. Retrieved November 11, 2011.
  3. 1 2 3 4 5 6 "United Rentals, Inc. – Company History". Fundinguniverse.com. Retrieved November 11, 2011.
  4. 1 2 3 4 "June 4, 2005 Entrepreneur tells of unknown future". StamfordAdvocate. May 10, 2011. Retrieved November 11, 2011.
  5. 1 2 "Business solutions from". AllBusiness.com. June 13, 2005. Retrieved November 11, 2011.
  6. 1 2 3 4 5 http://www.forbesmagazine.com/customreprints/article/geekygarbageman.pdf
  7. 1 2 3 4 "October 1, 2003 United Rentals CEO Steps Down". StamfordAdvocate. May 10, 2011. Retrieved November 11, 2011.
  8. 1 2 3 Silvia Sansoni, 06.01.98 (April 8, 1996). "The earth mover". Forbes. Retrieved November 11, 2011.
  9. 1 2 3 4 5 Nov 1, 2003 12:00 pm By Brandey Chewning Smith, RER (November 1, 2003). "United REntal CEO". Rermag.com. Retrieved November 11, 2011.
  10. 1 2 3 4 ""United Rentals' best days are still ahead" Brad Jacobs". Rentalmanagementmag.com. Retrieved November 11, 2011.
  11. 1 2 3 4 Christine Coleman. "Hoxie, Jacobs and Plugge join the Rental Hall of Fame". Rentalmanagementmag.com. Retrieved November 11, 2011.
  12. 1 2 Wall Street Journal, June 17, 1998, “United Rentals Business Bores All but Holders”
  13. ↑ "United Rentals Makes Offer For Acquisition-Minded Rival – New York Times". The New York Times. April 6, 1999. Retrieved November 11, 2011.
  14. 1 2 Sep 1, 2001 12:00 pm By Michael Roth, RER (September 1, 2001). "Built to LAST". Rermag.com. Retrieved November 11, 2011.
  15. ↑ "Rental Firms to Merge in $1.2-Billion Deal – Los Angeles Times". Articles.latimes.com. July 24, 2007. Retrieved November 11, 2011.
  16. 1 2 "LAS VEGAS RJ:BUSINESS: United Rentals to merge with rival U.S. Rentals". Reviewjournal.com. June 17, 1998. Retrieved November 11, 2011.
  17. ↑ "Investment Firm Buys 15% of United Rentals". Rermag.com. February 1, 1999. Retrieved November 11, 2011.
  18. 1 2 "Chief Executive Plans to Leave United Rentals – New York Times". The New York Times. September 30, 2003. Retrieved November 11, 2011.
  19. ↑ Stephen Taub (July 14, 2005). "United Rentals CFO on 30-Day Notice – Accounting". CFO.com. Retrieved November 11, 2011.
  20. ↑ "United Rentals – In the News – August 16, 2005 – United Rentals Board Terminates President and CFO John Milne". Ur.com. August 16, 2005. Retrieved November 11, 2011.
  21. ↑ Younglai, Rachelle (September 8, 2008). "UPDATE 2-United Rental to pay $14 mln to settle SEC charges". Reuters. Retrieved November 11, 2011.
  22. ↑ "UNITED RENTALS, INC. | United Rentals Announces Agreement To Be Acquired By Cerberus Capital Management". Newswire.ca. Retrieved November 11, 2011.
  23. 1 2 Dealbook (December 24, 2007). "United Rentals Concedes Defeat in Cerberus Battle". Dealbook.nytimes.com. Retrieved November 11, 2011.
  24. 1 2 Feeley, Jef (December 21, 2007). "United Rentals Can't Force $4 Billion Cerberus Buyout (Update4)". Bloomberg. Retrieved November 11, 2011.
  25. ↑ Oct 1, 2007 12:00 pm (October 1, 2007). "Brad Jacobs Steps Down as United CEO". Rermag.com. Retrieved November 11, 2011.
  26. 1 2 Oct 31, 2008 4:26 pm (October 31, 2008). "Jacobs, Hoxie and Plugge to be Inducted in Rental Hall of Fame". Rermag.com. Retrieved November 11, 2011.
  27. ↑ "FORTUNE 500 2007: United Rentals". CNN. Retrieved November 11, 2011.
  28. ↑ "Bradley S. Jacobs to Lead Equity Investment of up to $150 Million in Express-1 Expedited Solutions". Reuters. June 14, 2011. Retrieved November 11, 2011.
  29. 1 2 3 "The big bet of Brad Jacobs". dcvelocity.com. January 9, 2012. Retrieved June 6, 2012.
  30. ↑ A. Ananthalakshmi (October 6, 2011). "DealTalk: Brad Jacobs: a U.S. transport serial acquirer". Reuters. Retrieved November 11, 2011.
  31. ↑ "Jacobs has big plans for Express-1 expediter". greenwichtime.com. February 7, 2012.
  32. ↑ "12 October 2011 XPO Logistics rings the NYSE Opening Bell". Youtube.com. 12 Oct 2011.
  33. 1 2 "Logistics Industry Consolidates". themiddlemarket.com. January 23, 2012.
  34. ↑ http://coyote.com/
  35. ↑ "XPO Logistics Agrees to Buy 3PD for $365 Million in Cash and Stock". wsj.com. July 15, 2013.
  36. ↑ "XPO Logistics Completes Acquisition of 3PD". xpologistics.com. August 16, 2013.
  37. ↑ "XPO Logistics Inc : to Acquire Pacer International". 4-traders.com. 6 January 2014.
  38. ↑ "XPO Logistics Agrees to buy Pacer". Wall Street Journal. 6 January 2014.
  39. ↑ McCracken, Jeffrey (July 30, 2014). "XPO Pulls Off 500 Purchases While Bypassing Wall Street". bloomberg.com. Retrieved September 2, 2014.
  40. ↑ "VIDEO: The M&A King Wheeling and Dealing Without Bankers". BloombergTV. September 8, 2008. Retrieved September 2, 2014.
  41. ↑ "XPO Logistics Gets $700 Million Investment to Fund Acquisitions". Wall Street Journal. September 11, 2014. Retrieved October 23, 2014.
  42. ↑ "Singapore's GIC, others invest $700 mln in XPO Logistics". reuters.com. September 11, 2014. Retrieved October 23, 2014.
  43. ↑ "XPO looks to beef up contract logistics business". reuters.com. September 12, 2014. Retrieved October 23, 2014.
  44. ↑ "Our Company". xpo.com. Retrieved October 23, 2014.
  45. ↑ "XPO Logistics Buying Norbert in $3.53 Billion European Deal". bloomberg.com. Retrieved June 1, 2015.
  46. ↑ "XPO Logistics to buy France's Norbert Dentressangle". reuters.com. Retrieved June 1, 2015.
  47. ↑ "PSP Investments, GIC and Ontario Teachers’ Pension Plan to invest $700 Million in XPO Logistics". canadianshiper.com. Retrieved February 17, 2016.
  48. ↑ "XPO LOGISTICS RAISES $1.26 BILLION OF EQUITY". investors.xpologistics.com. Retrieved February 17, 2016.
  49. ↑ "Buying Con-way, XPO shifts from 'asset light' to 'asset right'". joc.com. Retrieved February 17, 2016.
  50. ↑ "XPO closes purchase of Con-way; layoffs begin within Con-way system". dcvelocity.com. October 30, 2015. Retrieved February 16, 2016.
  51. ↑ "XPO Logistics Chairman and CEO Jacobs talks about next steps for Con-way acquisition and integration". logisticsmgmt.com. November 5, 2015. Retrieved February 16, 2016.
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