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PE-backed STG Logistics acquires XPO Logistics’ intermodal unit

STG Logistics, which is backed by Wind Point Partners and Oaktree Capital Management, has acquired the intermodal division of XPO Logistics, a provider of container transportation services.

STG Logistics, which is backed by Wind Point Partners and Oaktree Capital Management, has acquired the intermodal division of XPO Logistics, a provider of container transportation services. No financial terms were disclosed.

PRESS RELEASE

CHICAGO, March 25, 2022 /PRNewswire/ — STG Logistics (“STG”) announced today that it has expanded its leading position in containerized logistics through the acquisition of the intermodal division of XPO Logistics, one of the largest providers of container transportation services in North America. The combined business, which will go to market as STG Logistics, will stand as North America’s leading provider of seamless, fully integrated, port-to-door containerized logistics services including drayage, transloading, warehousing, fulfillment, rail transportation, and associated final mile distribution. As part of this transaction, STG, a portfolio company of Wind Point Partners (“Wind Point”) since 2016, was recapitalized by Wind Point as well as funds managed by Oaktree Capital Management, L.P. (“Oaktree”), including Oaktree’s Transportation Infrastructure Investing and Global Opportunities Group.

STG CEO Paul Svindland and STG President and CFO Geoff Anderman will continue to lead the company. Current STG COO Todd Larson will lead the legacy STG operations as EVP of STG and COO of STG’s Distribution segment, and Paul Smith, formerly President of XPO’s intermodal division, will lead STG’s intermodal operations as EVP of STG and COO of STG Intermodal.

“I could not be more excited about this game-changing acquisition,” said Mr. Svindland. “We are combining STG’s leading position in facility-based container logistics with XPO Intermodal’s leading position in container transport, creating a platform with unparalleled capabilities. Once combined, the STG network will be able to handle a container from the instant it’s ready at a port or customer facility to the moment each individual shipment arrives at its final destination, all the while providing customers full visibility and a single source of accountability.”

STG is a leading provider of facilities-based containerized logistics services including container deconsolidation, reconsolidation, transloading, warehousing, and outsourced transportation solutions including final mile delivery. STG operates a nationwide facility network comprised of 28 port locations totaling more than five million square feet and maintains relationships with more than 65 inland partners who enable final mile access to all major metro areas. Since Wind Point’s investment in 2016, STG has more than quadrupled in size through organic growth and 10 add-on acquisitions.

The XPO intermodal division acquired by STG is North America’s third largest provider of containerized transportation services, providing intermodal drayage and rail brokerage services for retailers, manufacturers, third party logistics providers, and other types of customers. The network features 48 locations, 11,000 containers, 2,200 tractors, and 5,200 chassis. The division was formed through XPO’s purchase of Pacer in 2014 and Bridge Terminal Transport in 2015.

Konrad Salaber, Managing Director at Wind Point, commented “We are thrilled to complete this initial stage of our journey with the team at STG and excited to have the opportunity to reinvest in the combined business as it embarks on its next phase of growth. STG is expected to exceed $1.7 billion in 2022 revenue and maintains an aggressive strategy for growth focused on transloading, warehouse solutions, fulfillment, and domestic intermodal services. We’re also excited to be partnering with Oaktree, a group we know well with a highly successful track record investing in a variety of port, rail, and related logistics infrastructure assets.”

“We are excited to partner with Wind Point and STG to acquire XPO’s Intermodal division,” said Emmett McCann, Managing Director and Co-Portfolio Manager of Oaktree’s Transportation Infrastructure Investing strategy. “This business combination creates a market leading, vertically integrated port-to-door supply chain logistics company providing mission critical transportation solutions to its customers.” Added Jared Parker, Managing Director of Oaktree’s Global Opportunities strategy, “The investment in highly defensible containerized logistics and intermodal infrastructure is highly consistent with our thesis around the evolution of the U.S. supply chain.”

Paul Smith, incoming COO of STG Intermodal, stated “The combination of STG and the intermodal division of XPO creates a truly unique business in containerized logistics whose value proposition will resonate with every single one of our customers. This transaction will also allow us to expand our intermodal franchise as well as our scope of services in an aggressive way, which will present numerous exciting new opportunities for the entire team.”

Financing for the transaction was led by Antares Capital and included Deutsche Bank Direct Lending, Stifel, Citizens, and MUFG. Kirkland & Ellis provided transaction counsel to Wind Point and Oaktree and McCarter & English provided transportation counsel to STG, Wind Point and Oaktree. KPMG and PWC provided transaction advisory services on the transaction. Deutsche Bank Securities Inc. acted as M&A adviser to STG Logistics and Oaktree on STG’s acquisition of XPO’s intermodal division. Harris Williams acted as M&A adviser to STG Logistics and Wind Point on the recapitalization of STG. Raymond James acted M&A adviser to XPO Logistics.

About Wind Point Partners
Wind Point Partners is a Chicago-based private equity investment firm with approximately $4 billion in assets under management. Wind Point focuses on partnering with top caliber management teams to acquire well-positioned middle market businesses where it can establish a clear path to value creation. The firm targets investments in the consumer products, industrial products and business services sectors.
Additional information about Wind Point is available at www.windpointpartners.com.

About Oaktree
Oaktree is a leader among global investment managers specializing in alternative investments, with $166 billion in assets under management as of December 31, 2021. The firm emphasizes an opportunistic, value-oriented and risk-controlled approach to investments in credit, private equity, real assets and listed equities. The firm has over 1,000 employees and offices in 20 cities worldwide. For additional information, please visit Oaktree’s website at http://www.oaktreecapital.com/.

Oaktree’s Transportation Infrastructure Investing Group seeks to make investments in North American transportation assets, businesses and infrastructure, including airports, seaports and railroads, where it can pursue value-creation strategies geared towards sustainable growth.

About STG Logistics
STG is a leading asset-light provider of complex and highly customized logistics and transportation services focused on the global supply chain. The company’s comprehensive suite of services includes value-added contract services and specialized warehousing including container freight management, inventory management, distribution, and e-commerce fulfillment as well as multi-modal transportation. With a network of 28 multipurpose technology-enabled facilities, over 60 partner locations, and numerous transportation partners, STG provides its customers with one of the most expansive containerized logistics solutions in North America. STG operates U.S. Customs Bonded, TSA certified, and International Free-Trade Zone facilities.
Additional information about STG Logistics is available at www.stgusa.com.