Hub Group Finds Buyer for Mode Transportation
Less than a month after saying it would explore strategic alternatives for Mode Transportation, Hub Group found a buyer to pay more than $200 million for its agent-based multimodal freight brokerage business.
York Capital Management, a private wealth management firm with offices in New York, London and Hong Kong, agreed to pay $238.5 million for the company, according to a statement issued by Hub Group on Aug. 31.
Hub ranks No. 12 on Transport Topics’ list of the largest freight brokerage firms in North America with net revenue of $121 million and gross revenue of $1 billion in 2017.
The sale price is about 10 times Mode’s adjusted earnings before interest, taxes and depreciation for the 12 months ended June 30, Mode officials said.
Excluded from the sale is TemStar Services, a transcontinental refrigerated intermodal transportation business with a fleet of more than 300 trailers.
Proceeds from the sale of Mode will be used for acquisitions of businesses in new and existing service lines, company officials said.
Hub Group ranks No. 33 on the TT list of largest logistics companies in North America and generates most of its business from intermodal rail services, but has expanded its dedicated trucking business in recent years. The company also retains a separate highway truck brokerage business and owns Unyson Logistics, a third-party transportation management firm.
“We are focused on acquiring high quality businesses that will deepen our relationships with our customers, strengthen our platform for growth and create shareholder value,” Hub stated in a press release.
Mode President Jim Damman said the company is excited about joining forces with York “and the support they will provide as we execute our growth plan.”
Mode is headquartered in Dallas and provides truckload, less-than-truckload, intermodal, rail, ocean, air and managed transportation services through a network of independent freight agents.
The company will be owned by the York Special Opportunities Fund, a private equity platform for York Capital Management, a firm that manages approximately $18 billion in total assets for families and high-wealth individuals.