XPO Logistics, Inc. announced that it has divested its North American intermodal business to STG Logistics, Inc. in a US$710 million deal, subject to a customary post-closing purchase price adjustment.

In a statement, it said the intermodal unit, which XPO has reported as part of its Brokerage and Other Services segment, generated US$1.2 billion in 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.

"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," said Brad Jacobs, chairman, and chief executive officer of XPO Logistics.

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

It said, however, that 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.