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The Greenwich, Conn.-based third-party logistics provider’s CEO Brad Jacobs is bullish on his company’s technology focus as it secures $1.6 billion in debt refinancing that will lower
interest payments 12 percent over the next five years. XPO Logistics Chief Executive Brad Jacobs said this week that technology is high on the priority list for virtually all of its
customers. “In every single one of our business lines, customers want more advanced technology solutions and they want to find ways to take costs out their supply chains,” said Jacobs,
speaking to _American Shipper_ this week in the wake of its move Wednesday to refinance $1.6 billion in debt. The company last week announced it will also offer $535 million in a private
offering of senior notes due 2023 and has secured a $400 million loan facility. The debt refinancing will allow XPO to save $40 million per year over the next five years in interest
payments (about 11 to 12 percent of current interest obligations annually) and extend the maturity dates of its debt. That, Jacobs said, will enable more positive cash flow and lower cost of
capital. XPO had a net profit of $42.6 million in the second quarter of 2016, a huge swing from the $75.1 million it lost in the same quarter in 2015, as the company has refrained from
acquisitions to focus on ramping up cross-departmental integration and customer service. In terms of technology, Jacobs said XPO has been closely tracking developments in the startup
space, where new software companies are developing visibility, procurement, and marketplace capabilities in the trucking industry. “Just to put things in perspective, if you look at the
top 50 startups and aggregate them all, that’s still a fraction of what we spend on technology,” he said. “We’re spending $400 million on technology. We watch them closely, and we haven’t
found anything they’re doing that we’re not doing in terms of optimization or track and trace.”