This is a developing story and will be updated with additional material.
Transportation giant Hub Group Inc. said Tuesday it has acquired truck brokerage Choptank Transport Inc., which specializes in refrigerated transportation, for $130 million in cash, a move that puts Hub in the over-the-road reefer business for the first time.
The transaction, which closed on Tuesday, creates strong cross-selling opportunities for Oak Brook, Illinois-based Hub (NASDAQ:HUBG), company executives said in an analyst call after the deal was announced. Hub’s over-the-road business focuses on dry van and LTL. Its customers have never had access to over-the-road cold chain services, executives said.
“This acquisition delivers on our strategy to provide the industry’s premier supply chain solutions, and will advance our position in the growing cold-chain segment,” said Hub Group Chairman and CEO David Yeager in a press release.
Choptank, based in Preston, Maryland, on the state’s Eastern Shore, is expected to post $470 million in revenue in 2022. It historically grew its top line by 10%. Hub executives expect to produce mid-teens revenue growth post-acquisition through a combination of Choptank’s top-line performance and cross-selling opportunities. Choptank’s 400 employees will join Hub.
“We share similar values of service, integrity and innovation, which we are excited to bring together to fuel our continued growth,” said Choptank CEO Geoff Turner in the release. “Choptank brings our wealth of industry experience, a strong carrier network, and innovative technology that, when combined with the industry presence and reputation of Hub Group, will unlock value for our customers and move our business forward.”
Hub already has a substantial presence in the refrigerated intermodal space. It announced Tuesday that it will add 550 intermodal reefer boxes to reach 1,000 boxes.