Brad Jacobs

We didn't think it was worth that.

We thought if you looked at the sum of the parts of the business, this should be trading many turns of multiple higher than that, significantly higher than that.

But we said, I don't think we're going to get there on our own because the market has spoken.

So we decided to do something that very few companies do, which is to make ourselves smaller.

And we divided the company up into three companies.

And those three companies, we put the circles around the different parts of the business of how we're going to divide it up with two things in mind.

One was, how can we run this business with greater focus operationally, execution-wise?

And secondly...

What will get a better model?

Because Wall Street generally likes pure plays.

As a general rule, not always, but generally likes pure plays.

It likes to have easy to understand stories.

Typical sell side analyst, for example, covers 32 stocks.

So they don't have the luxury of time to really go deep studying stuff.

We divided the company up into one company that was primarily LTL, which is XPO.

Another company that was primarily brokerage, truck brokers, non-asset, which is RXO.

And a third company, which we were talking about before, which is the supply chain business, was GXO.

And now each of those companies gets EBITDA multiples of 11, 12, 13 times.

It's a big change.

So we unleashed the value from getting multiple expansion by dividing the company up into smaller companies.