- Forward Air sold its final mile business to Hub Group for $262 million, the companies announced Wednesday.
- The largest non-asset acquisition in Hub Group’s history includes about 45 locations and more than 640 employees, according to the companies.
- Hub Group CEO and President Phil Yeager said the deal will help grow its non-asset logistics segment and “deepen our value to our customers through the addition of this excellent team.” The final mile business grew revenue over 150% since its inception in 2019, Forward Air said.
Holiday shopping for what’s likely to be one of the final large trucking M&A deals of the year, Hub Group picked up a business specializing in residential final mile delivery and installation of appliances and other big and bulky goods.
Yeager had indicated to investors on an earnings call this summer the carrier was looking to expand its logistics segment through acquisitions. For Forward Air, the deal provides capital that could be useful if Omni Logistics’ lawsuit succeeds in scuttling its attempt to bail on a planned merger.
“This acquisition aligns with our long-term investment strategy and enables our goal of providing the premier supply chain solution,” Yeager said in the announcement. “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 ending Sept. 30, Forward Air’s final mile business generated $289 million in revenue. After the acquisition, Hub Group expects its overall final mile revenue to more than double to $481 million from $192 million.
Forward Air Final Mile senior leadership was granted “contingent compensation” to stay on 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 adviser to Hub Group on the deal. Carlton Fields served as legal counsel and Jewell Advisory Group served as M&A adviser to Forward Air.
Editor’s note: This story was updated to add further insights on the deal.