Hub Group to acquire CaseStack

Earlier today, freight transportation services provider Hub Group announced it plans to acquire CaseStack for $225 million in cash.

Established in 1999, Santa Monica, Calif.-based CaseStack has two primary business units. One unit, CaseStack Logistics Services, provides consolidation services for consumer packaged goods (CPG) companies that sell into the North American retail market. And its other unit, CaseStack Technology Services functions as a technology-enabled truck brokerage serving the LTL (less-than-truckload) market.

Non-asset based CaseStack generated revenue of roughly $242 million for the 12-month period ended September 30, 2018, as well as EBITDA at roughly $22 million. CaseStack has around 280 employees.

Hub Group officials said they expect this transaction to be made official in early December.

“We are delighted to welcome CaseStack’s employees, customers, carriers and service providers into the Hub Group family,” said Dave Yeager, Hub Group’s Chairman and Chief Executive Officer, in a statement.  “This acquisition further advances our vision to diversify and enhance our service offering to our customers.  We are very impressed with the business that the CaseStack management team has built.  We believe there will be significant opportunities to enhance network optimization with our customers.  Similar to Hub, CaseStack brings an established high service, performance-driven culture.”

“The CaseStack team is excited to join Hub Group,” said Dan Sanker, CEO and founder of CaseStack, in a statement.  “We believe Hub is the perfect fit for us.  Our core values, including collaboration, determination and excellence, are aligned.   The CaseStack team will continue to provide retailer consolidation programs to consumer packaged goods customers and technology enabled brokerage services.  We are thrilled that Hub will sponsor our growth by introducing new customers and enhancing our services with assets, drivers and technology.  There couldn’t be a better team to help our customers with their challenges.  This combination will provide terrific opportunities for our customers, service providers and team members.”

Robert W. Baird & Co. analyst Ben Hartford wrote in a research note that with CaseStack to become part of Hub Group, Hub views the potential for cross-selling between CaseStack and Hub's offerings as substantial given little existing overlap between customer bases, as well as continued organic growth for CaseStack itself (segment-leading market share, with 500 customers in a 6,000-15,000-customer market).