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Dive Summary:
- Forward Air sold its last-mile operations to Hub Group for $262 million, the companies was announced Wednesday.
- The largest non-asset acquisition in Hub Group history includes approximately 45 locations and more than 640 employees, the companies said.
- Hub Group CEO and Chairman Phil Yeager said the deal will help grow the asset-less logistics division and “deepen our value for our customers through the addition of this outstanding team.” The last-mile business has grown revenue by more than 150% since its launch in 2019, Forward Air said.
Dive Insight:
Holiday Shopping For one of the last big trucking M&A deals of the year, Hub Group picked up a business that specializes in final-mile residential delivery and the installation of appliances and other large and bulky goods.
Yeager had told investors on an earnings call this summer that the carrier was looking to expand its logistics division through acquisitions. Forward Air, the deal provides funds that could come in handy if Omni Logistics’ lawsuit succeeds in striking down its bid to bail out a planned merger.
“This acquisition aligns with our long-term investment strategy and enables our goal of providing the leading supply chain solution,” Yeager said in the release. “Our cultural alignment with FAFM, increased scale and complementary offerings will lead to enhanced value for our customers and long-term growth for our team.”
The transaction is expected to be immediately accretive to Hub Group’s 2024 GAAP and cash earnings per share, the company said. For the last 12 months ended Sept. 30, Forward Air’s last-mile business generated $289 million in revenue. Following the acquisition, Hub Group expects total last-mile revenue to more than double to $481 million from $192 million.
Forward Air Final Mile’s leadership received “contingent compensation” to remain with the business, which will operate under the Hub Group Final Mile brand, according to Hub Group.
Winston & Strawn LLP served as lead legal counsel and Stephens Inc. was financial advisor to Hub Group on the deal. Carlton Fields served as legal counsel and Jewell Advisory Group served as M&A counsel to Forward Air.
Editor’s note: This story has been updated to add further information about the deal.