Hub Group Buys Forward Air Final-Mile Unit for $262 Million
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Hub Group Inc. is set to buy the final-mile unit of Forward Air Corp. for about $262 million in cash, Oak Brook, Ill.-based Hub Group said.
The unit provides residential final-mile delivery and installation of big and bulky goods, particularly appliances, its new owner said.
In the 12 months through the end of the third quarter of 2023, the unit generated $289 million in revenue.
Once the acquisition is complete, the unit will be part of Hub Group Final Mile.
The company said the acquisition would drive a continued diversification into non-asset-based logistics services.
Hub Group’s enlarged final-mile unit is expected to turn in annual revenues of $481 million, the company said.
Hub Group ranks No. 11 on the Transport Topics Top 100 list of the largest for-hire carriers in North America. The company also ranks No. 2 on TT’s top intermodal and drayage carriers list and No. 15 on the TT Top 100 list of the largest logistics companies in North America.
Forward Air CEO Tom Schmitt says the company's final-mile business grew revenue more than 150% since inception in 2019. (Forward Air via Facebook)
Hub Group signaled an acquisition spree was in the works in October, announcing a new capital allocation plan to accompany the company’s Q3 results. Part of the plan included a promise to go shopping for non-asset logistics businesses.
Forward Air ranks No. 1 on the TT sector list of the top air/expedited carriers in North America. It ranks No. 27 on the for-hire TT 100.
Greenville, Tenn.-based Forward Air said the unit being sold has 45 locations and more than 640 employees.
Schmitt
“Our final-mile business grew revenue over 150% since inception in 2019,” Forward Air CEO Tom Schmitt said in a separate statement.
But corporate clarity remains Forward Air’s top priority as it enters the next phase of its Grow Forward strategy, he added. Launched earlier in 2023, the strategy is focused on growing the company’s less-than-truckload business by seeking high-value freight offerings from a larger customer base.
Part of the strategy was the acquisition of Omni Logistics, a deal announced in August. Dallas-based Omni ranks No. 38 on the TT Top 100 logistics companies list.
Forward Air said the combined entity would be a scaled LTL enterprise focused on providing customers with multimodal service for complex, high-service and high-value freight needs.
However, those plans have devolved over the past few months into a legal spat between the two companies. Omni filed suit Oct. 31 to push the merger through, while Forward Air filed a counterclaim alleging its prospective partner was no longer acting in good faith, citing delays and misrepresentations.
Forward Air is seeking a court order mandating that it is not obligated to close the deal and is entitled to terminate the agreement.
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