RXO shares soar as C.H. Robinson announces $5.8B cash and stock buyout

Investing.com -- C.H. Robinson Worldwide Inc. said today it will buy RXO Inc. in a deal worth $5.8 billion. RXO shares rose over 18.5% in pre-market trading on Monday.

The agreement calls for RXO stockholders to receive $17.25 per share in cash and 0.0856 shares of C.H. Robinson common stock for each RXO share. This represents total consideration of $30.25 per share, a 27% premium to RXO's 90-day volume-weighted average price and a 29% premium to Friday's closing price.

RXO stockholders will own 11% of the combined company when the deal closes. The merged entity will have an enterprise value above $25 billion.

Stockholders can choose to receive $30.25 per share in all-cash or 0.1992 shares of C.H. Robinson common stock in all-stock consideration. This choice is subject to proration procedures designed to ensure about 57% of the payment is in cash and 43% in stock.

C.H. Robinson said it expects to achieve $300 million in net run-rate cost synergies within two years after closing. The company said the deal will be accretive to adjusted earnings per share within nine months of closing and mid-teens accretive to adjusted EPS in 2028.

The transaction combines C.H. Robinson's global forwarding capabilities with RXO's North American brokerage, expedited and last mile services. RXO is a Fortune 1000 provider of asset-light transportation solutions based in Charlotte, North Carolina.

C.H. Robinson will fund the cash portion with new debt financing and has secured a fully underwritten commitment for a bridge facility with Morgan Stanley Senior Funding Inc. The company expects to reduce leverage to its target range of 1.75x to 2.25x net debt to adjusted EBITDA by the end of 2028. Share repurchases will be paused until the target leverage ratio is reached.

MFN Partners LP, which owns about 17% of RXO shares, agreed to vote in favor of the deal.

Both boards approved the transaction unanimously. The deal is expected to close in the first half of 2027, pending regulatory approval and RXO stockholder approval.

Original Article

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