GXO Cleared to Acquire Wincanton, Taps DHL Vet as New CEO
In a final report issued Thursday, the U.K.'s Competition and Markets Authority (CMA) cleared the $965 million transaction after a yearlong probe into the deal. As part of the clearance, GXO says it will divest 'a small number' of Wincanton grocery contracts in the U.K.
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A day after the CMA approval, GXO unveiled it found its next CEO to succeed chief executive Malcolm Wilson, who is retiring later this year.
Patrick Kelleher, who most recently served as CEO for top competitor DHL Supply Chain North America, will take on the role starting Aug. 19. Kelleher had worked his way up through DHL Group's ranks since joining the company in 1992, before assuming his leading role at the North American supply chain division last July.
During his time at the contract logistics provider, Kelleher had led strategic initiatives spanning transportation and supply chain planning, oversaw DHL's deployment of advanced robotics throughout the warehouse, including the Boston Dynamics Stretch robot and the Locus Robotics LocusBots.
Kelleher also presided over four M&A transactions in the past year alone, including May's acquisition of retail logistics specialist IDS Fulfillment and the deal to acquire the reverse logistics division of Inmar Intelligence.
'Patrick is a world-class operator with the relevant experience to lead GXO through its next phase of growth,' said Brad Jacobs, chairman of GXO's board of directors, in a statement. 'His proven track record and deep expertise in engineered solutions, automation, and cutting-edge contract logistics make him uniquely qualified to drive value for our customers and shareholders. We're thrilled to welcome him as our new CEO.'
In February, at the Manifest supply chain and logistics conference in Las Vegas, Kelleher told Sourcing Journal that he believed the contract logistics market is primed for growth, namely due to the ongoing demand for warehouse space.
'It's about being thoughtful around decisions that are made in standing up additional warehousing capacity. That is an inflexible asset in terms of being able to move from one location to another,' Kelleher said. 'We need to be picking the right location, making sure that is data informed, working with the breadth of customers that we have to have a good view of the different markets that we're participating in, or should be participating in—to make those long-term investments.'
The logistics provider also raised its 2025 guidance on Thursday, including expected synergies of the Wincanton deal, which remains subject to integration in the third quarter.
Organic revenue growth is now forecast to be between 3.5 percent and 6.5 percent, up from a previous range of 3 percent to 6 percent. Adjusted EBITDA is expected to be in the range of $860 million to $880 million, increase from the prior scope of $840 million to $860 million.
'Across our operations, we are seeing better than expected volumes and accelerated productivity gains in existing operations and new startups,' said Wilson.
The combined news sent GXO's stock up more than 11 percent in Friday morning trading.
As for the Wincanton deal, the CMA still has to approve a buyer for the dedicated grocery warehousing services, which refer to facilities that are used exclusively by a single customer.
'Warehousing services play a crucial role in ensuring the seamless movement of goods across the U.K., allowing our supermarkets to maintain well-stocked shelves with thousands of items we buy every day,' said Richard Feasey, chair of the CMA's independent inquiry group. 'Healthy competition in this market is key to managing costs for supermarkets and grocers and improving their performance—ultimately ensuring consumers pay the best possible prices for products in stores.'
With the acquisition cleared, teams at GXO and Wincanton are permitted to collaborate on specified ongoing aerospace and defense proposals in the U.K. effective immediately. No further regulatory reviews are required.
GXO has been busy as it awaited the ruling from the CMA.
Earlier this month, the company also introduced an enhanced version of its multi-tenant warehousing solution GXO Direct to U.S. customers. Debuting in North America in 2018, GXO Direct is designed to enable retail customers to use the company's network of warehouses to position goods closer to end consumers for one-day delivery.
The newest update integrates service capabilities GXO acquired from the $181 million acquisition of e-commerce order fulfillment platform PFSweb, including high-touch contact center services, secure payments and fraud protection and distributed order orchestration systems.
In May, the company also extended its partnership with supply chain solutions provider Blue Yonder to power its warehouse management system (WMS) capabilities.
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