Forward Air sells final-mile unit to Hub Group for $262M

Forward Air announced Wednesday that it sold its final-mile business to Hub Group for $262 million. The deal comes as Forward refocuses its efforts on increasing share in the premium less-than-truckload market.

Forward Air Final Mile (FAFM) has 46 locations and more than 640 employees, which will transfer to Hub Group (NASDAQ: HUBG), a news release said. The unit generated $289 million in revenue for the 12-month period ended Sept. 30., mostly from the delivery and installation of large appliances.

On its third-quarter call, Tom Schmitt, Forward’s chairman, president and CEO, said the company was undertaking a “strategic portfolio review” and potentially selling noncore assets that don’t fully support its LTL growth plans.

“Our Final Mile business grew revenue over 150% since inception in 2019 and returned significant value to Forward’s employees, customers and shareholders,” Schmitt said. “We are pleased the Final Mile team has joined a first-class company and team of people.”

In a separate statement, Hub Group said the acquisition of FAFM will more than double final-mile revenue on its platform. It said the deal was its largest nonasset transaction in company history. It expects FAFM to be immediately accretive to earnings starting next year.

“We are excited to welcome the Forward Final Mile team to Hub Group,” said Phil Yeager, Hub Group president and CEO. “Through this transaction, we will continue to grow our non-asset logistics segment and deepen our value to our customers through the addition of this excellent team and their best-in-class appliance capabilities.”

Source: freightwaves.com