UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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On June 27, 2011, the Journal of Commerce published the following news story in its print magazine
and on its website, www.joc.com. The news story features comments from an interview with Bradley S.
Jacobs, managing member of Jacobs Private Equity, LLC. The text of this news story is provided
below.
“Betting on Brokerage: Bradley Jacobs plans to base his third multibillion-dollar enterprise on
freight,” by William B. Cassidy, June 27, 2011
BRADLEY S. JACOBS is buying into transportation in a big way. The founder of two
multibillion-dollar enterprises, Jacobs and his associates will invest $150 million in Express-1
Expedited Solutions, a publicly owned trucking and logistics company.
He plans to leverage that $150 million investment in Express-1 to create a multibillion-dollar
non-asset transportation and logistics giant that would compete with the largest non-asset brokers,
including $9.3 billion C.H. Robinson Worldwide and $6 billion Expeditors International of
Washington.
“There are thousands of acquisitions opportunities” in transportation brokerage, Jacobs told The
Journal of Commerce. “We’re going to buy a lot of freight brokers of all sizes all around the
country. We’re talking to brokers with as little as $5 (million) to $10 million in annual revenue
and ones with as much as $1 billion in revenue.”
And he isn’t just shopping for domestic truck freight brokers. He plans to acquire expedited
trucking and international air and ocean freight forwarding businesses as well. Express-1 Expedited
has divisions that specialize in all three services.
“I love expedited,” he said, noting Express-1 is the fifth largest U.S. expedited trucker,
according to The Journal of Commerce and SJ Consulting Group. “I’d like to move that up a rung; I
don’t like being No. 5 but No. 1 or 2,” Jacobs said. “We’re going to buy some other expeditors, and
we’re going to increase the pace at which we sign up owner-operators.”
Jacobs is striking while the transportation and logistics acquisition market is hotter than
it’s been in years, with a slew of acquisitions, mergers, investments and partnerships occurring in
trucking, air cargo and ocean shipping. His investment vehicle is Jacobs Private Equity in New
York. The firm will purchase 43 million shares of Express-1’s stock for $75 million, and then
exercise warrants to acquire another 43 million shares for $75 million. Co-investors will provide
another $15 million for total investment of $150 million.
If shareholders approve the investment plan, already backed by Express-1’s board, Jacobs will
become chairman and CEO and majority owner of the fast-growing $158 million company. Buchanan,
Mich.-based Express-1 increased its revenue 58 percent in 2010 from $100 million in 2009, while its
profit jumped 187 percent. Sales have risen 31 percent in the last two quarters.
Express-1’s expedited trucking revenue grew 51.3 percent in 2010. Concert Logistics Group
increased its revenue 58.5 percent, while Bounce Logistics, its truckload brokerage unit, increased
revenue 91.8 percent.
Jacobs plans to keep the company’s management team, Express-1 co-founder and CEO Michael
Welch, President Jeff Curry and Director of Business Development Daniel Para. Curry will run the
expedited portion of Express-1, while Para will lead Concert Group Logistics, Express-1’s
forwarding wing.
“Mike (Welch) will still have responsibilities at Express-1, but also will be working with me
on acquisitions,” Jacobs said. “We’re already starting.”
Jacobs, 54, may not be well known in trucking, but he’s no stranger to Wall Street. Since
1992, he has raised more than $6 billion from the debt and equity markets. He started his first
company, Amerex Oil Associates, in 1979, and his second firm, oil trading company Hamilton
Resources (UK), in 1984.
In 1989, he founded United Waste Systems, which he built into the fifth-largest U.S. waste
disposal firm through more than 200 acquisitions. He sold the publicly owned firm in 1997 for $2.2
billion. According to Forbes magazine, Jacobs turned an initial $3 million investment in United
Waste Systems into $120 million in eight years.
He then turned to the highly fragmented equipment rental business, co-founding United Rentals
in 1997 and serving as its chairman until 2007. United Rentals, which Jacobs once said was founded
“around my dining room table,” grew through acquisitions to become the largest construction
equipment rental firm in the U.S. When Jacobs stepped down in 2007, the company had $3.9 billion in
sales. The initial investment in the company by Jacobs and partners totaled $46.5 million.
Jacobs said the non-asset logistics business is ripe for the same type of consolidation
strategy he used in the waste management and equipment rental industries.
“When I got into the waste and rental businesses, it was premised on a similar sense of the
penetration trend,” he said. “In the waste business, there were regulations coming into play that
put old dumps out of business and created demand for new technologically sophisticated players. In
construction, a lot of the contractors were buying equipment and only using it for a portion of the
year,” generating demand for seasonal rental business. He sees similar trends at work in
transportation.
Transportation “is bigger and more fragmented than other industries I’ve had success with in
the past,” he said. “I started my search in transportation with the idea of consolidating trucking
companies in the U.S., but I migrated to an asset-light model when I saw the high returns on
capital. I was very impressed by C.H. Robinson and Expeditors.”
Jacobs also believes third-party logistics providers, freight brokers and forwarders will grow
and gain market share as shippers outsource more transportation. “There are a large number of
shippers that routinely use a very small number of capacity providers out of habit,” he said. “My
nose tells me there will be more outsourced transportation services. It’s a service that
underutilized.”
He also expects smaller truckers to increasingly rely on 3PLs and brokers to secure business.
“I’m not convinced those smaller trucking companies are efficiently finding the best freight to
haul,” he said. “I think that over time truckers will use brokers more and more and more. I could
be wrong, but I’m willing to make a bet on that.” JOC
Contact William B. Cassidy at wcassidy@joc.com.
[End of news story]
Additional Information and Where to Find It
In connection with the proposed equity investment by Jacobs Private Equity, LLC, the Company will
prepare a proxy statement to be filed with the SEC. When completed, a definitive proxy statement
and a form of proxy will be mailed to the stockholders of the Company. THE COMPANY’S STOCKHOLDERS
ARE URGED TO READ THE PROXY STATEMENT REGARDING THE PROPOSED TRANSACTIONS BECAUSE IT WILL CONTAIN
IMPORTANT INFORMATION. The Company’s stockholders will be able to obtain, without charge, a copy of
the proxy statement (when available) and other relevant documents filed with the SEC from the SEC’s
website at http://www.sec.gov. The Company’s stockholders will also be able to obtain, without
charge, a copy of the proxy statement and other relevant documents (when available) by directing a
request by mail or telephone to Express-1 Expedited Solutions, Inc., Attn: Secretary of the Board
of Directors, 3399 South Lakeshore Drive, Suite 225, Saint Joseph, Michigan 49085, telephone: (269)
429-9761, or from the Company’s website, www.xpocorporate.com.
Jacobs Private Equity, LLC and the Company and its directors and officers may be deemed to be
participants in the solicitation of proxies from the Company’s stockholders with respect to the
proposed equity investment. Information about the Company’s directors and executive officers and
their ownership of the Company’s common stock is set forth in the proxy statement for the Company’s
2011 Annual Meeting of Stockholders, which was filed with the SEC on April 29, 2011. Stockholders
may obtain additional information regarding the interests of the Company and its directors and
executive officers in the proposed equity investment, which may be different than those of the
Company’s stockholders generally, by reading the proxy statement and other relevant documents
regarding the proposed equity investment, when filed with the SEC.
Cautionary Statement Regarding Forward-Looking Statements
The communications included herein contain forward-looking statements. Statements that are not
historical facts, including statements about beliefs or expectations, are forward-looking
statements. These statements are based on plans, estimates and projections at the time the
statements are made, and readers should not place undue reliance on them. In some cases, readers
can identify forward-looking statements by the use of forward-looking terms such as “may,” “will,”
“should”, “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,”
or “continue” or the negative of these terms or other comparable terms. Forward-looking statements
involve inherent risks and uncertainties and readers are cautioned that a number of important
factors could cause actual results to differ materially from those contained in any such
forward-looking statements. Factors that could cause actual results to differ materially from those
described in the communications contained herein include, among others: uncertainties as to the
timing of the equity investment; the possibility that competing transaction proposals will be made;
the possibility that various closing conditions for the equity investment may not be satisfied or
waived; the possibility that the warrants, if issued, will not be exercised; general economic and
business conditions; and other factors. Readers are cautioned not to place undue reliance on the
forward-looking statements included in the communications contained herein, which speak only as of
the date such statements were made. Neither the Company nor any other person undertakes any
obligation to update any of these statements in light of new information or future events.