GXO Logistics, Inc. is set to expand its logistics operations in North America through the acquisition of e-commerce order fulfillment platform PFSweb. The acquisition, valued at approximately $181 million, will allow GXO to enhance its capabilities in short cycle, high-volume product categories such as luxury goods and cosmetics.

PFSweb has partnerships with over 100 brands, including L’Oréal USA, Champion, and Kendra Scott, making it a strategic addition for GXO. The acquisition comes at an opportune time, as the online fulfillment market is cooling post-pandemic, and the price is considered reasonable given the capacity gain.

While GXO is primarily based in Greenwich, Conn., it generates most of its revenue from Europe. The company’s expansion into North America will be bolstered by PFSweb, which derives 86% of its revenue from the region. PFSweb operates 11 fulfillment centers, with plans to open two more in the U.S. next year.

As part of the acquisition, GXO will gain access to three new support services offered by PFSweb: payments and fraud protection, customer care, and distributed order orchestration systems. The addition of these services will further enhance GXO’s capabilities beyond warehousing and distribution.

PFSweb employees will join GXO and integrate into the company, while the fulfillment provider’s core fulfillment offerings will be streamlined. This move follows PFSweb’s divestment of its digital commerce consultancy to Merkle for $250 million.

GXO’s focus on automation and technology is reflected in its growth of automated sites and implementation of various systems. In the second quarter of this year, approximately 30% of revenue came from automated sites, with a 65% increase in total technology and automated system implementations.

The acquisition of PFSweb is expected to close in the fourth quarter of this year, marking another strategic move by GXO to expand its operations and capabilities in North America.

Sources:

– Source 1: Sourcing Journal

– Source 2: Author’s knowledge