XPO Logistics sells intermodal business to STG Logistics

$710 million divestiture advances XPO’s strategic plan to create two pure-play, publicly traded companies through a spin-off later this year

XPO Logistics, Inc. announced that it has divested its North American intermodal business to STG Logistics, Inc. for cash proceeds of approximately $710 million, subject to a customary post-closing purchase price adjustment.

The intermodal unit, which XPO has reported as part of its Brokerage and Other Services segment, generated $1.2 billion of revenue in 2021. The divested operations provide rail brokerage and drayage services; 48 locations and approximately 700 employees have transferred to the buyer in the transaction.

Brad Jacobs, chairman and chief executive officer of XPO Logistics, said, “This divestiture simplifies our business model and moves our capital structure closer to investment-grade — two priorities in our strategic plan to unlock significantly more value for our stakeholders. We’ve completed a key step in preparing for our planned spin-off, when we’ll separate XPO into two publicly traded leaders in less-than-truckload transportation and tech-enabled brokered transportation services.”

XPO will update its guidance to reflect the divestiture when the company reports its first quarter 2022 financial results.

Raymond James & Associates, Inc. served as financial advisor to XPO for the transaction, and Wachtell, Lipton, Rosen & Katz served as legal advisor.

There can be no assurance that the planned fourth quarter 2022 spin-off will occur or, if it does occur, of its terms or timing.