XPO Logistics has completed the sale of its intermodal business to STG Logistics for approximately $710 million, marking a significant step in the company's strategic transformation to focus on its core less-than-truckload (LTL) and asset-light brokerage operations.
Strategic Refocus
The transaction represents XPO's continued execution of its plan to create two pure-play public companies - one focused on LTL transportation and another on tech-enabled truck brokerage services. This follows the company's successful spin-off of GXO Logistics in 2021, which specialized in contract logistics.
"This move significantly simplifies our business model and allows us to concentrate on our core strengths," said Brad Jacobs, XPO's chairman and CEO. "We're preparing for the upcoming spin-off that will create two industry-leading public companies."
Transaction Details
The divested intermodal unit, which generated $1.2 billion in revenue in 2021, will operate as STG Intermodal under STG Logistics' ownership. Approximately 700 XPO employees will transition to STG as part of the deal.
XPO originally entered the intermodal sector through its 2014 acquisition of Pacer International, then North America's third-largest intermodal provider. The business offers rail brokerage and drayage services through 48 locations.
STG's Strategic Expansion
For STG Logistics, the acquisition combines its facility-based container logistics expertise with XPO Intermodal's transportation capabilities, creating an integrated platform for container movement from ports to final destinations.
"This merger creates a platform with unmatched capabilities," said STG CEO Paul Svindland. "We're doubling our container fleet from 2,000 to 4,000 units to support this expansion."
Industry Perspective
Industry analysts view the transaction as a value-creating move for both parties. "XPO is wisely simplifying its structure to eliminate the conglomerate discount," said Ben Gordon of Cambridge Capital Management. "The sale allows XPO to focus on becoming a pure-play LTL operator similar to Old Dominion."
For STG, the deal represents a strategic enhancement of its service offerings and market position in container logistics.
Future Outlook
XPO plans to complete the separation of its brokerage business by year-end, while STG will integrate the intermodal operations into its expanding logistics network. The moves reflect ongoing evolution in the logistics sector as companies optimize their portfolios to meet changing market demands.