48 | FORBES ASIA APRIL 2018D
ecades ago, Bradley Jacobs studied math and piano
(classical and jazz) at Bennington and Brown be-
fore dropping out to make money. Now the bald-
ing 61-year-old CEO of XPO Logistics invokes that
background to explain how he’s parlayed sequential
roll-ups in the gritty businesses of garbage collection, heavy equip-
ment rentals and delivering stuf into a $2.6 billion net worth. “Any-
one can buy a company. You just have to sign a contract and wire the
money,’’ he says. But conceiving how those acquired company parts
can be integrated into an organically growing entity takes a special
creative talent. “Even though I’m not writing a song [in integrating
companies], I’m thinking of ideas that are abstract. It’s a combina-
tion of math and music. I’m visualizing them as clearly as I possibly
can in space and time and then actually executing on them.”
If that sounds a tad highfalutin, consider this: In September 2011
Jacobs’ family investment irm ponied up $62.5 million to gain con-
trol of Express-1, a Michigan-based freight expediter doing $170
million in sales a year. He renamed Express-1 ater its XPO stock
symbol, moved its headquarters to Connecticut and over four years
spent more than $7 billion on 17 acquisitions. Today XPO’s stock
trades at $102, giving it a market cap of $12. 3 billion, for a com-
pound annual return of 38 % under Jacobs’ watch. hat’s more than
double the S&P’s return and better than Amazon’s.
Jacobs’ stake is worth $2 billion, making up the bulk of his for-
tune, which includes a 50-acre Greenwich estate, a 17,000-square-
foot Palm Beach waterfront mansion just down the road from Pres-
ident Trump’s Mar-a-Lago, and a starter modern art collection with
works by Picasso, de Kooning, Calder and Lichtenstein.
Truth is, corporate roll-ups have a bad rep. Some operators have
overpaid, taken on too much debt or even cooked the books. Yet 14
of 16 analysts covering XPO rate it a buy, persuaded by Jacobs’ deal-
making smarts, his execution and his vision of an integrated logis-
tics company that uses technology to capitalize on the growth of
e-commerce and the worldwide supply chain. Ater Jacobs’ acquisi-
tion run, XPO has strong positions in the U.S. and Europe in freight
brokerage, last-mile delivery (getting heavy goods like refrigerators
from warehouses to consumers), less-than-truckload shipping and
contract logistics (handling all of a company’s logistics). Last year it
netted $ 3 12 million ($2.45 per diluted share) on $15.4 billion in rev-
enues. Free cash low increased 77% to $ 3 74 million in 2017, and
XPO projects it will top $600 million in 2018.
Signiicantly, ater leveraging up in 2015 to buy U.S. trucker Con-way and France’s Norbert Dentressangle, a top player in the more ef-
icient European logistics market, Jacobs turned of the spigot and
returned to headquarters to focus on making the whole thing work.
Headquarters is a single-story uninished concrete building on the
edge of Greenwich, where glass walls mean employees can’t duck Ja-
cobs’ view and “Results matter” slogans hang on conference room
walls. “Missing quarters to me is like termites. Where there’s one
there’s more,’’ Jacobs lectures. Matthew Adams, an analyst at Orbis
Investment Management, XPO’s largest outside shareholder, with
a $2 billion stake, says of the entrepreneur: “You have the inancial
sophistication of a great capital allocator, combined with someone
who’s also a true operator.”
Jacobs has hardly sworn of acquisitions; with XPO’s leverage re-
duced by half since 2015, he brags about having $8 billion in “dry
powder.” But these days he’s talking up organic growth and the
$450 million a year XPO is pouring into automation and technolo-
gy. Of its 95,000 employees, 1,700 are tech professionals, including
100 data quants. “Anything we can automate, we are either automat-
ing already or we have on the drawing board to automate,” he says.
In addition to pricing algorithms, XPO has developed the Uber-
like apps Drive XPO and Ship XPO, which allow truckers to pick up
loads and customers to see their cargo move in real time.
“Back in the 1990s I wrote reports saying FedEx is a technolo-
gy company disguised as a transportation company. Today the same
could be said about XPO,’’ observes analyst Donald Broughton, who
tracks transportation companies at his own St. Louis-based irm.FOR MOST OF HIS CAREER, Jacobs has been doing deals. His father
was a jeweler in Providence, but college dropout Jacobs was drawn
to the big proits being made in oil as prices spiked in the late 1970s.
He read up on oil brokers and then cold-called his way into the busi-
ness, enlisting the legendary Ludwig Jesselson, head of commodi-
ty house Phillip Brothers, as a mentor. (Jesselson’s son is now XPO’s
lead independent director.) Eventually Jacobs moved to London
(where he met his oil-trader wife, Lamia) and made millions by se-
curing oil from places like Russia and Nigeria and chartering ships
to transport it to Europe. By 1989, however, futures markets were
squeezing the proits of globe-trotting arbitragers like Jacobs, and he
returned to the U.S. to research his next venture.
Jacobs settled on waste hauling ater reading an analyst’s report
describing fat proits at Browning-Ferris. Looking for both talent
and inside dope, he interviewed dozens of industry managers. TwoThe Maestro of Mergers
BY ANTOINE GARABillionaire roll-up artist Bradley Jacobs has spent more than $7 billion assembling a
sprawling logistics company. Now he’s tuning it up to deliver big proits.FORBES ASIA
LOGISTICS