Hub Group Inc. announced Wednesday, Sept. 12, that Comtrak Logistics, its wholly owned subsidiary, has entered into a definitive agreement to acquire the assets of DNJ Transportation Inc. and its affiliates.
DNJ is a privately-held intermodal trucking company whose primary focus is international drayage for the intermodal sector. DNJ was established in 1975 and is headquartered in Cicero, Ill. It has 116 drivers, of which 60 percent are owner-operators. DNJ has four terminals located in Illinois and Indiana. DNJ’s revenue in 2006 was about $14 million. Hub Group estimates the DNJ acquisition will be accretive to its annual earnings per share by about $0.03.
The total purchase price is about $12.1 million. Hub will pay $9.6 million in cash at closing, which is expected to occur at the beginning of October. The purchase price will be subject to adjustment based on DNJ’s working capital at closing. In addition, the agreement provides for an earn-out for the remainder of 2007, 2008 and 2009, which combined will not exceed $2.5 million. The closing is subject to certain customary closing conditions and approvals.
“We are excited about adding DNJ to our Comtrak drayage business,” says David P. Yeager, chief executive officer of Downers Grove, Ill.-based Hub Group. “DNJ’s international intermodal business will provide us with immediate growth in this key market. The acquisition is consistent with our strategic plan to increase the amount of drayage we perform.”
Joe Tovo III, vice president of DNJ, will join the Comtrak team as manager of international drayage. “We welcome all of the DNJ employees and customers and look forward to serving the market with our combined resources,” Yeager says.