Brad Jacobs, who built freight transportation provider XPO which begat contract logistics provider GXO, is stepping down as chairman of the two companies.
Jacobs announced early Monday that he is taking the step so he can focus on QXO, the recently-launched company that is focused on rolling up building products suppliers into what is planned to be a leader in an industry that historically has been highly fragmented.
The move is effective December 31. Jacobs is executive chairman at XPO and non-executive chairman at GXO.
“By transitioning out of my board positions at XPO and GXO, I can dedicate even more energy to QXO and Jacobs Private Equity,” Jacobs said in a prepared statement. “We intend to grow QXO into a $50 billion revenue leader in building products distribution through accretive acquisitions and organic growth. XPO and GXO are in excellent shape and their prospects are very bright.”
After Jacobs stepped down as CEO of XPO in 2022, he retained the role of executive chairman at the LTL carrier. GXO was spun off in 2021.
XPO (NYSE: XPO) at its core was and is an LTL provider. But it had grown into numerous other freight-related businesses over time.
The first plan to break up the company and become a pure play LTL operator was abandoned in March 2020, in the wake of the equity market collapse following the start of the pandemic.
But the plan resumed later, and it saw sales or spinoffs of its intermodal unit, its contract logistics operations which became publicly-traded GXO (NYSE: GXO), and the spinoff of freight brokerage RXO (NYSE: RXO). The end result was that XPO became solely an LTL provider.
The two companies where Jacobs has been chairman have had solid but not spectacular performances in the last year. GXO stock is up 8.76% in the last 52 weeks, according to data from Barchart. For the prior 52 weeks, XPO is down about 5.75%, but in the last month it is up just over 6% and about 14.5% in the last three months.
QXO (NYSE: QXO) made its first acquisition earlier this year when it bought Beacon Roofing Supply. A bid to acquire GMS, a specialty building products distributor, was unsuccessful as Home Depot (NYSE: HD) ultimately acquired the company.
“We intend to grow QXO into a $50 billion revenue leader in building products distribution through accretive acquisitions and organic growth,” Jacobs said in the statement.
For the nine months ended September 30, QXO reported net sales of about $4.6 billion, following the Beacon acquisition.
The QXO stock price reflects more of the sentiment of investors who have seen what Jacobs has done elsewhere rather than a reflection of the current QXO business. The end result is that QXO’s price/sales ratio is about 262. By contrast, at XPO, according to Barchart, it is 2.18.
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