Downers Grove, Ill.-based Hub Group Inc. announced that it has entered into a definitive agreement to acquire the assets of Memphis, Tenn.-based Comtrak Inc. Hub Group is a nonasset-based freight transportation management company that provides intermodal, truckload brokerage, logistics and distribution services. The company operates through a network of more than 30 offices throughout the United States, Canada and Mexico.
Comtrak, established in 1983, provides rail and international drayage services, full truckload transportation, container storage, yard management, truck brokerage and other logistics services. Comtrak utilizes company drivers and third-party owner-operators. With 2005 revenues of about $85 million, the company has 381 employees and 15 terminals located primarily in the southeastern United States.
Hub will pay $38 million in cash at closing, which is expected to occur during the first quarter of 2006. The purchase price will be subject to adjustment based on Comtrak’s working capital at closing. In addition, the agreement provides for an earn-out for 2006 and 2007, consisting of two cash payments, each of which will not exceed $5 million. The closing is subject to certain customary closing conditions and approvals.
David P. Yeager, Hub’s chief executive officer, says the acquisition is consistent with management’s strategic plan to increase the amount of local trucking, or drayage. Through the acquisition, Hub Group will have immediate entry into the international intermodal market and will leverage Comtrak’s innovative technology in its existing drayage business, Yeager says.