This marks the third attempt at a roll-up by CEO Brad Jacobs. Jacobs played a role in building Waste Management and United Rentals. Formerly known as Express-1, the company was a growing and profitable expedite transporter and freight forwarder coming out of the recession. Brad Jacobs took control of the company in 2011 with a $75m investment to fund a high-profile M&A program. Several acquisitions and capital raises later, XPO is an industry behemoth at $17bn annual revenue.

Today, XPO provides freight brokerage, less than truckload, warehousing, and order fulfillment services to businesses around the world. With the rise in e-commerce, many of these offerings seem to be excellent sources of growth.

There are 92m shares outstanding and a current share price of $80 makes it a $7.4bn market cap. XPO has $500m in cash and $5.5bn in debt for an enterprise value of $12.4bn.

The company has been buying back its own stock to the tune of $1.9bn over the past 3 quarters (share count down from 127m to 92m in that span). XPO isn’t an expensive stock either. At $80 per share, XPO trades at 0.72x EV/Sales and 12x free cash flow which will likely go towards more share repurchases and paying down debt..

XPO is somewhat of a transportation conglomerate. A mix of various businesses like freight brokerage, LTL trucking, and warehousing services. Competitors trade well north of 10x EBITDA vs. XPO at 7x. Why? Revenue has fallen 1-3% YoY the past 2 quarters as some larger contracts roll off and debt has growing with buybacks. Still, these are services with excellent long-term prospects. If XPO can return to growth (sales and earnings) or start to reduce its debt, then this stock is a great buy at current prices.