* Jacobs to take over as CEO, biggest shareholder
* May switch listing to Nasdaq
* Will grow business through acquisitions
* Express-1 shares up 11 pct to 4-mth high
(Adds comments by Jacobs)
By A. Ananthalakshmi
BANGALORE, June 14 Entrepreneur and investor
Bradley Jacobs and his private equity firm are to invest $150
million in Express-1 Expedited Solutions Inc (XPO.A), a
third-party logistics provider, and aim to build "a
multibillion-dollar" business over the next several years.
Jacobs, who will be the majority shareholder of Express-1,
which has a market value of $72 million, said he plans to
increase the business through acquisitions, adding he is
looking at small and big companies in freight brokerage and
"We're going to start off buying some small and medium-size
companies but over time the plan is certainly buy some larger
companies as well," he told Reuters in an interview.
"I've been meeting with roughly 100 acquisition candidates
over the last two months and they are of all sizes, I've looked
at companies as little as $10 million to $20 million in
revenue, and I've looked at companies approaching $1 billion in
Jacobs has a solid track record in founding small companies
and building them, through acquisitions, into market leaders.
In 1997, he started United Rentals (URI.N) and, some 250
acquisitions later, turned it into the world's largest
equipment rental firm. Private equity firm Cerberus Capital
Management offered $6.6 billion for the company in 2007, but
this bid was later withdrawn.
United Rentals is currently valued at $1.37 billion.
Jacobs also founded United Waste Systems, a leading U.S.
garbage collector, which he sold to a rival for about $2.5
billion in 1997.
Jacobs, hunting for targets to go build another large
company this time around, looked at several industries
including government services, healthcare and education before
settling on transportation, attracted by consolidation
opportunities in the highly fragmented sector.
To tackle the global logistics market, Jacobs will take
over as CEO of Express-1 and sweep out current management. Only
the chairman, Jim Martell, will remain on the board, Jacobs
The international freight forwarding market is estimated to
be worth $150 billion, with the 10 largest firms combined
having only a 40 percent market share.
"I want this to be a multibillion-dollar company within
several years," Jacobs told Reuters. "The industry is big, and
I'm planning on creating a very big company."
Jacobs said he may also switch Express-1's stock listing to
Nasdaq from the Amex exchange.
Express-1 shares jumped more than 11 percent on Tuesday to
a 4-month high of $2.44.
Senior management roles will change, Jacobs said, with
current CEO Mike Welch staying on to help with the acquisition
The new investors will receive preferred stock, convertible
into 43 million Express-1 shares at $1.75 each, and warrants to
purchase an additional 43 million shares. The company will
effect a 4:1 reverse stock split once the deal closes.
Jacobs Private Equity will own 71 percent of Express-1 once
the deal closes and the preferred stock is converted and
Deutsche Bank Securities and UBS Investment Bank advised
Jacobs. BB&T Capital Markets were financial advisers to
(Reporting by A. Ananthalakshmi in Bangalore, additional
reporting by Soyoung Kim in New York, Editing by Ian Geoghegan
and Matthew Lewis)