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April 21, 2015 8:55 AM, EDT

Echo Global Logistics to Acquire Command Transportation for $420 Million

Command Transportation

Echo Global Logistics Inc. agreed to buy brokerage firm Command Transportation for approximately $420 million to expand the buyer’s non-asset-based capabilities for truckload customers.

Command, which is No. 8 on The Transport Topics list of the Top 25 brokers, had $560 million in revenue last year. Chicago-based Echo, which is twice as large by revenue as Command, said $25 million of the purchase price will be paid in stock.

Echo said it has arranged as much as $500 million with Morgan Stanley, Credit Suisse and PNC to pay for the purchase.

“By bringing together the strengths of Echo and Command, this transaction will create a leading provider of technology-enabled transportation management solutions with enhanced scale in the truckload market,” said the statement by Echo, which ranks No. 6 on TT’s brokerage list and No. 45 on the TT logistics 50.

“Through this highly complementary combination, we are taking the next step in our evolution to create a stronger company,” Echo CEO Douglas Waggoner said.

The statement also said the combined company would have more than 1,680 sales representatives and 34 offices in the United States.

In addition to announcing the purchase of Skokie, Illinois-based Command, Echo reported first-quarter net income of $3.3 million, or 14 cents per share, a 37% year-over-year improvement from $2.4 million, or 10 cents, in 2014. Revenue rose 14% to $283.5 million.

Echo’s revenue from transactional business was 22% higher, and the managed transportation revenue slipped 5.7%. Revenue after transport costs were paid rose 26% to $53.3 million.