All-weather M&A maven’s legacy is hit by a storm

QXO

06/10/2026 13:00

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
By Jonathan  Guilford
NEW YORK, Oct 5 (Reuters Breakingviews) - Current events have a way of overtaking financial wizardry. When veteran dealmaker Brad Jacobs jumped into logistics in 2011, he envisioned an M&A roll-up hardy to “all parts of the economic cycle.” As an exemplar, he pointed to C.H. Robinson CHRW.O, the largest North American surface freight brokerage. That paragon is now acquiring RXO RXO.N, one of his corporate offspring, for about $6 billion. Its stock fell 15%. As Jacobs is also discovering at a new venture, bad breaks for an industry can become overwhelming.
RXO spun off from XPO XPO.N, Jacobs’ logistics mother ship, in 2022. Through to late September of this year, its stock was essentially flat. Like its peers, the firm was hit by a perfect storm of post-pandemic volatility. Just this year, spot flatbed truck rates per mile rose from around $2.20 per mile to nearly a dollar higher in July before slumping back.
Whipsawing demand, shifting consumer habits, and a rush of new trucking companies and subsequent bankruptcies all played a part. Recent signs are somewhat gloomy: the Cass Freight Index, a measure of shipment volumes and expenditures, remains depressed, and the Iran war massively hiked diesel costs.
RXO pulls together shippers and trucks rather than purchasing its own supplies, but these costs feed through. Analysts now expect an operating loss for 2026, after rapidly drawing down forecasts, according to Visible Alpha.
QXO QXO.N, the building products consolidator that Jacobs has now moved on to helming, has similarly seen estimates collapse. The underlying cause is similar: housing has been brutalized by high rates and economic perturbations.
C.H. Robinson is wading into all of this with a sizable deal. Boss Dave Bozeman is betting that the $16 billion valued company’s AI-focused operating nous can turn things around. Indeed, Big Tech has shown that much more revenue can be squeezed from fewer employees, and the bidder expressly calls out RXO’s lower gross profit per worker versus its own.
That lends credibility to $300 million in projected synergies. Yet add it even to RXO’s expected 2027 rebound to $120 million in operating profit, tax the lot, and the deal’s implied return is a middling 6%. C.H. Robinson is more upbeat by focusing on 2028 expectations. To its credit, the company has held gross profit per North American truckload shipment steady despite increasing costs, and Bozeman's tech overhaul has helped increase efficiency and juice a once-stuck stock price. Jacobs vaunts the value of downturns in unlocking such opportunities, and a deal for RXO at this price is one of them. It's just easy to understand why investors fear being blown off-course.
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CONTEXT NEWS
C.H. Robinson said on October 5 that it had agreed to acquire third-party logistics operator RXO for $5.8 billion. Under the terms of the transaction, RXO investors will receive $17.25 per share in cash and 0.0856 shares of the bidder's stock.
Morgan Stanley served as financial adviser to C.H. Robinson, while Goldman Sachs advised RXO.

(Editing by Jennifer Saba; Production by Pranav Kiran)
((For previous columns by the author, Reuters customers can click on GUILFORD/ Jonathan.Guilford@thomsonreuters.com))