DOWNERS GROVE, Ill. — Hub Group, Inc., a major non-asset based freight transportation management company, has entered into a definitive agreement to acquire the assets of Comtrak, Inc.
The purchase is expected to be accretive to Hub’s results of operations in 2006.
Comtrak’s services include rail and international drayage for the intermodal sector, full truckload transportation, container storage, yard management, truck brokerage and other logistics services. It was established in 1983 and is headquartered in Memphis, Tennessee. It has 381 employees and fifteen terminals located primarily in the southeastern United States. Comtrak utilizes company drivers and third-party owner operators to serve its customers. Comtrak revenues are expected to be about $85 million in 2005.
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.
“We have worked with Comtrak for more than 20 years and believe this is the best drayage company in the country,” said David P. Yeager, Hub’s CEO. “This acquisition makes Hub a stronger company and a more formidable competitor for a number of reasons. First, the acquisition is consistent with our strategic plan that calls for Hub to increase the amount of local trucking (or drayage) we perform. Second, Comtrak performs drayage for the international intermodal market. This transaction will provide us with an immediate proven entry into this market. Third, Comtrak also has innovative technology, which we can leverage in our existing drayage business. Finally, I expect this transaction to be accretive to the consolidated operations of Hub Group, Inc. in 2006 and in the future.”
Hub Group, Inc. provides intermodal, truckload brokerage, logistics and distribution services. The Company operates through a network of over 30 offices throughout the United States, Canada and Mexico.
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