Hub Group and Consumer Packaged Goods Market Leader CaseStack are Joining Forces
Hub Group has announced it will acquire non-asset based logistics provider CaseStack, Inc., offering retailer-driven collaborative consolidation programs and freight brokerage services; adding scale and enhances solutions for their customers.
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Hub Group is a $3 billion asset light freight transportation management company providing comprehensive intermodal, truck brokerage and logistics services. The Company operates through a network of offices throughout the United States, Canada and Mexico.
- Company Quicklook
- Entered into an agreement to acquire CaseStack for $255 million in cash
- CaseStack is the market leader offering retailer-driven consolidation programs for consumer packaged goods companies
- Adds LTL-focused transportation brokerage
- Innovative, proprietary technology enables cost-saving, performance-enhancing supply chain services
- Expands Hub Group’s integrated supply chain solutions offering
- Expect significant network optimization opportunities
- CaseStack’s talented senior leadership team will remain with the business
- Non-asset based business model
- Accretive to earnings in 2019
CaseStack & Hub Group
Hub Group, Inc. (“Hub Group”; NASDAQ: HUBG), an innovative leader in freight transportation management, announced that it has entered into an agreement to acquire CaseStack, Inc. for $255 million in cash.
Hub Group expects the Transaction will close by early December 2018, subject to the satisfaction of customary closing conditions and required approvals.
“We are delighted to welcome CaseStack’s employees, customers, carriers and service providers into the Hub Group family,” said Dave Yeager, Hub Group’s Chairman and Chief Executive Officer.
“This acquisition further advances our vision to diversify and enhance our service offering to our customers. We are very impressed with the business that the CaseStack management team has built. We believe there will be significant opportunities to enhance network optimization with our customers. Similar to Hub, CaseStack brings an established high service, performance-driven culture.”
CaseStack delivers exceptional service to its customers through its approximately 280 employees and proprietary technology systems.
CaseStack - Two Lines of Business
CaseStack Logistics Services is the market leader in providing consolidation services to consumer packaged goods companies that are selling into the North American retail market.
CaseStack Transportation Services is a technology-enabled truck brokerage with a focus on LTL transportation.
The Company operates a non-asset based business model, working with transportation carriers and warehousing firms to deliver an integrated solution offering.
For the 12 month period ended September 30, 2018, the Company generated revenue of approximately $242 million and EBITDA of approximately $22 million.
The Company’s main offices are in Santa Monica, CA and Fayetteville, AR.
“The CaseStack team is excited to join Hub Group,” said Dan Sanker, CEO and founder of CaseStack.
“We believe Hub is the perfect fit for us. Our core values, including collaboration, determination, and excellence, are aligned. The CaseStack team will continue to provide retailer consolidation programs to consumer packaged goods customers and technology-enabled brokerage services. We are thrilled that Hub will sponsor our growth by introducing new customers and enhancing our services with assets, drivers and technology. There couldn’t be a better team to help our customers with their challenges. This combination will provide terrific opportunities for our customers, service providers, and team members.”
The $255 million in cash 'Transaction' consideration (the “Transaction”) will be paid with cash on hand and borrowings from Hub Group’s credit facility.
Hub Group estimates there will be approximately $11 million of annual intangible amortization related to the Transaction or approximately $0.25 per share, and the Transaction will be accretive to earnings in 2019.
Robert W. Baird & Co. analyst Ben Hartford wrote in a research note that with CaseStack to become part of Hub Group, Hub views the potential for cross-selling between CaseStack and Hub's offerings as substantial given little existing overlap between customer bases, as well as continued organic growth for CaseStack itself (segment-leading market share, with 500 customers in a 6,000-15,000-customer market).
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