Hub Group has announced that its subsidiary, Hub Group Trucking, has entered into an agreement to acquire Estenson Logistics for approximately $306m. The purchase will broaden Hub Group’s offerings to include dedicated logistics services.
Estenson is an asset-based carrier founded in 1999. It has over 1,200 power units and more than 5,000 trailers operating at around 120 customer locations. In 2016, Estenson generated revenues of approximately $250m.
David Yeager, Chairman and Chief Executive Officer of Hub Group, said: “We have been searching for an acquisition in the dedicated space for some time and have found an organisation with a great fit in terms of culture, management style and business philosophy. We believe that cross-selling opportunities are in excess of $100m in the next five years.”
The acquisition will also add to Hub Group’s offerings in intermodal, truck brokerage, logistics and dedicated trucking and will expand its asset base to include over 3,800 power units. It expects the transaction to boost overall earnings in 2017.
Following the closing of the Transaction, the business will be named Hub Group Dedicated Services. The company’s leadership team, including Tim Estenson, CEO, will continue in their current roles and the new Hub Group Dedicated Services will be headquartered in Mesa, Arizona.
The Transaction will be financed with a combination of cash, an assumption of Estenson’s secured equipment notes and borrowings under a new credit facility that will become effective as of the closing date. Hub Group expects the transaction will close on or about July 1, 2017, subject to the satisfaction of customary closing conditions and required approvals.
Source: Hub Group
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