A US-based transport and logistics business has expanded its supply chain solutions capability following its latest acquisition.
Hub Group has acquired Choptank Transport, a 3PL company and leader in non-asset refrigerated transport.
With its headquarters in Preston, Maryland, Choptank also has five other locations across the US including Atlanta, Baltimore, Dallas, Denver and Tampa.
It has an expansive network of 20,000 carriers throughout North America and specialises in chilled and frozen solutions.
Hub Group’s acquisition bolsters its presence in the reefer space and adds a complementary offering to serve multimodal transport and logistics needs.
The addition of Choptank is a significant milestone in Hub Group’s goal to attaining $6 billion USD in revenue by 2025.
“We are excited to welcome Choptank’s employees, customers and carriers to Hub Group,” said Hub Group Chairman and CEO, David Yeager. “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.”
The acquisition enhances Hub’s over-the-road refrigerated transportation solutions offering, and complements its growing fleet of 450 refrigerated intermodal containers. Hub Group intends to further invest in its refrigerated transportation offering by purchasing 550 refrigerated intermodal containers in 2022, bringing the size of its fleet to 1,000.
Choptank adds scale to Hub’s brokerage service line, with combined revenue of over $1 billion across dry van, refrigerated and LTL freight expected for 2021. The acquisition is expected to result in numerous complementary cross-selling opportunities for both Hub’s and Choptank’s customer bases. With this transaction, Hub’s non-asset business lines will contribute over 40 per cent of total revenue.
In addition to its expansive carrier network, Choptank’s 400 employees will join Hub Group. The company has developed a best-in-class proprietary technology platform that Hub will leverage to enhance its Brokerage operation.
“Our team is excited to join Hub Group,” said Choptank CEO, Geoff Turner. “We share similar values of service, integrity and innovation, which we are excited to bring together to fuel our continued growth. 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.”
Cash consideration for the transaction of $130 million USD was funded by cash on hand. In connection with the acquisition Hub Group granted contingent compensation to the owners and senior management team of Choptank to incentivise their retention and drive continued growth of the business. Choptank expects to generate over $450 million USD of annual revenue in 2021.