The nation’s fourth-largest asset-based intermodal marketing company, STG Logistics, filed for Chapter 11 bankruptcy protection in a New Jersey federal court on Monday. The pre-negotiated plan wipes out 91% of the company’s nearly $1 billion debt load and gives it $150M in new capital to support core business operations and to pay employees and vendors.
The debt-for-equity deal with sponsors and lenders is not a wind down. The company expects to emerge from bankruptcy in approximately five months.
“The Company has filed a number of typical ‘first day’ motions which, upon approval by the Court, will enable STG to continue to pay employee wages and benefits, maintain all customer programs, fulfill go-forward payments to key vendors, and execute other ordinary business functions,” a Monday statement read.
The pre-packaged deal is also expected to address recent litigation brought by the company’s minority lenders, who claim their rights were impaired through a deal that allowed STG to delay interest payments and allegedly gave more favorable terms to senior creditors.
Dublin, Ohio-based STG was acquired by private equity firm Wind Point Partners in 2016. As a portfolio company, it made 10 acquisitions, quadrupling in size.
It acquired XPO’s intermodal unit for $710 million (roughly 10x trailing EBITDA) in 2022. The deal included facilities, containers, tractors and chassis, making STG a vertically integrated port-to-door logistics provider, and reducing its reliance on third parties for drayage and intermodal capacity. (The acquisition occurred in conjunction with a recapitalization, which brought on a new financial partner, Oaktree Capital Management.)
In 2023, it acquired Best Dedicated Solutions — an over-the-road carrier specializing in expedited, dry van, temperature-controlled and flatbed transportation.
A $300 million debt-and-equity deal in 2024 provided it with “significant capital to fuel its ongoing expansion and strategic growth initiatives.” The transaction included extant private equity backers as well as Duration Capital Partners.
“Today’s announcement marks an important milestone in our efforts to strengthen STG amidst one of the most severe freight recessions in history,” said STG CEO Geoff Anderman. “We are confident that leveraging the chapter 11 process will best position the business for long-term growth and success.”
STG provides container freight station and transloading services through a network of nearly 100 owned and partner facilities. It is an asset-backed intermodal market company with 15,000 53-foot containers and 3,000 tractors (owner-operators), providing coast-to-coast, cross-border and intra-Mexico service. It also provides full-truckload and less-than-truckload services through a 25,000-plus carrier network.
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