Forward Air has announced the sale of its final-mile business to Hub Group for $262 million, as it focuses on expanding its share in the premium less-than-truckload market. This deal involves the transfer of Forward Air Final Mile’s 46 locations and over 640 employees to Hub Group. The unit generated $289 million in revenue for the 12-month period ending on Sept. 30, primarily from delivering and installing large appliances.
Forward’s chairman, president, and CEO, Tom Schmitt, noted that the company is conducting a strategic portfolio review and considering selling noncore assets that do not align with its LTL growth plans. He expressed satisfaction that the Final Mile team has joined Hub Group, a move that is expected to more than double final-mile revenue on Hub Group’s platform. The acquisition is seen as a significant step in growing Hub Group’s non-asset logistics segment and enhancing their appliance delivery capabilities.
In a separate statement, Hub Group’s president and CEO Phil Yeager welcomed the acquisition and mentioned that the deal is Hub Group’s largest nonasset transaction in its history. The senior management team of Forward Air Final Mile has been provided with contingent compensation targets to incentivize their retention and drive continued growth. FAFM will now operate under the Hub Group Final Mile brand.
Meanwhile, Forward Air’s controversial merger attempt with freight forwarder Omni Logistics has caused uncertainty. Forward’s shareholders have expressed concerns over the proposed acquisition of Omni, which they view as too expensive and potentially detrimental to Forward’s growth plans. The deal is being challenged on multiple fronts, with Forward alleging that Omni has not met certain closing conditions and requesting to be released from the agreement.
Overall, Forward’s shareholders continue to contest the transaction in court, while Hub Group looks forward to leveraging its expertise and capabilities in conjunction with Forward Air Final Mile’s unique appliance delivery services to drive growth and value for customers.
