Hub Group, Inc. (CCJ Top 250, No. 30) announced Wednesday, Dec. 20, that it has acquired Forward Air Final Mile (FAFM), a subsidiary of Forward Air Corporation (No. 34). Cash consideration for the transaction of $262 million was funded with cash on hand.
FAFM provides residential final-mile delivery and installation of big and bulky goods, with a focus on appliances. Through a network of independent service providers and 46 company-operated facilities, FAFM has delivery coverage throughout the continental US.
FAFM adds significant appliance delivery and installation capability to Hub Group’s Final Mile offering, the company said, enabling growth through cross-selling to Hub Group’s customer base. The acquisition – the largest non-asset transaction in Hub Group’s history – also advances Hub Group’s strategy of pursuing acquisitions that expand its comprehensive service offering.
“We are excited to welcome the FAFM team, customers and independent service providers into the Hub Group family,” said Phil Yeager, Hub Group’s CEO. “This acquisition aligns with our long-term investment strategy and enables our goal of providing the premier supply chain solution. 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.”
For the last 12 months ended Sept. 30, FAFM generated revenue of $289 million. The transaction is expected to be immediately accretive to Hub Group’s 2024 GAAP and cash EPS.
In connection with the acquisition, Hub Group granted contingent compensation to the senior management team of FAFM to incentivize their retention and drive continued growth in Hub Group’s Final Mile service offering. The combined businesses will operate under the Hub Group Final Mile brand.
“The FAFM team is excited to join Hub Group,” said Scott Robider, Senior Vice President of FAFM. “FAFM and Hub Group share similar values and goals: striving to be the logistics provider of choice through reliability, integrity, and innovation. We believe Hub Group’s middle-mile and final-mile expertise, combined with our unique appliance delivery capabilities, will unlock significant value for our combined customers and through this combination we expect to accelerate our growth versus what we have each done individually in the past.”
This fall, Forward Air was close to a deal that would have expanded its expedited LTL network via merger with Dallas-based Omni Logistics. However, following some investor pushback and claims that Omni defaulted on some of the deal's terms, the transaction was halted.
