COMPETITION WATCH: Hub Group acquires Exel Transportation Services
April 6, 2011
DOWNERS GROVE, Ill. -- Freight transportation management giant Hub Group has purchased Exel Transportation Services (ETS) for $83 million, before post closing adjustments. Exel is now a wholly-owned subsidiary of Hub Group, operating...
DOWNERS GROVE, Ill. — Freight transportation management giant Hub Group has purchased Exel Transportation Services (ETS) for $83 million, before post closing adjustments. Exel is now a wholly-owned subsidiary of Hub Group, operating independently under the name Mode Transportation.
“Simple and iconic, ‘mode’ refers to our ability to be mode-neutral and flexible in selecting the best transportation options for our clients,” said Mode president president Jim Damman of the name change.
“We are extremely pleased to welcome Mode’s independent business owners, employees, and customers into the Hub Group family,” said David Yeager, chairman and CEO of Hub Group. “This is an important day in the history of Hub. We are bringing together two strong and successful companies with highly complementary service offerings. Mode is the strongest third outstanding customer relationships and a diverse portfolio of solutions, including temperature-protected services. We are looking forward to working with the Mode Transportation team to continue its growth and expansion in the years to come.”
Mode Transportation consists of about 300 independent business owners who sell and operate the business throughout North America, with corporate offices in Dallas and Memphis, a company-managed operation in Dallas, and a temperature-protected services division, Temstar, located in Lombard, Ill.
Mode Transportation’s sales for the year ended Dec. 31 were approximately $717 million. The largest components were: intermodal revenue of $294 million, truck brokerage revenue of $279 million, and LTL revenue of $85 million.
Key leadership, including president Jim Damman, will continue in their current roles with Mode Transportation. Mode Transportation will remain headquartered in Dallas, Texas.
“We are excited to become a part of a well-respected transportation company with a history of growth and innovation. We believe access to Hub Group’s dedicated fleet and efficient drayage operations, among other benefits, will allow us to outpace the competition,” said Damman.
However, Damman stressed that Mode will maintain its autonomy as a separate entity within the Hub Group.
“Our success is due in large part to our independence and entrepreneurial spirit, and we are happy to work with a company that understands and supports this model,” Damman said.
Damman further stressed that its day-to-day operations, its customers’ payment terms, its technology platform, and its control over routing decisions will remain unchanged.
“Everything is business as usual. We will be using the same trucks, the same operations, and the same staff,” he said.
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