Freightquote acquisition pleases analysts, markets

C.H. Robinson Worldwide Inc.'s pending acquisition of Freightquote looks to be a strong move for the third-party logistics provider.

On Monday afternoon, the Eden Prairie, Minn., company (Nasdaq: CHRW) announced that it will acquire Kansas City-based freight broker Freightquote for $365 million cash. Since the announcement, the company's stock has risen to $74.49 as of about 1 p.m. CST Friday from $72.51 at Monday's close. The deal is helping push the stock toward its highest valuation since 2011, when it traded for as much as $81.48.

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On a Tuesday conference call, C.H. Robinson's executives said the strategic acquisition will strengthen the company's electronic commerce portfolio, add Freightquote's more than 80,000 small and midsize businesses to its customer base, strengthen its position in the less-than-truckload market and add Freightquote's talent to its more than 11,000 employee-strong staff.

In various notes, securities analysts agreed that the move is significant for the transportation industry and looks to be a good one for C.H. Robinson. However, the notes suggested that XPO Logistics Inc., a rival third-party logistics company (NYSE: XPO) based in Greenwich, Conn., was also bidding on Freightquote and was outbid by C.H. Robinson. XPO set up shop in Kansas City in November.

Cowen: Price target $74 a share

Analysts at New York-based financial services company Cowen Group Inc. said the deal is a solid strategic move for C.H. Robinson. The team, led by Jason Seidl, said competitive bidding for Freightquote might have driven the acquisition price up. The team sees good things ahead for C.H. Robinson.

Austin reports about construction, transportation, engineering and architecture.