Friday, May 24, 2024
HomeSourcingHub Group announces acquisition of TAGG Logistics

Hub Group announces acquisition of TAGG Logistics

Earlier this week, Oak Brook, Ill.-based freight transportation and logistics services provider Hub Group announced it has acquired St. Louis-based TAGG Logistics, a provider of e-commerce, B2B, and omnichannel fulfillment solutions, including warehousing and transportation services.

Hub said that the purchase price was $103 million in cash consideration, which was funded by cash on hand, coupled with Hub Group granting contingent compensation to the TAGG senior management team to incentivize their retention and drive continued growth of the business.

Established in 2006, TAGG Logistics has more than 4 million square-feet (SF) of warehousing space throughout the U.S., which Hub officials said allow for best-in-class and responsive e-commerce and B2B fulfillment capabilities. TAGG is on track to generate approximately $200 million of annual revenue in 2022. The company has approximately 800 employees at its 18 facilities.

What’s more, they added that bringing TAGG Logistics into the fold provides various benefits, including augmenting its presence in the consolidation and fulfillment space and adding a complementary e-commerce offering to serve its customers’ multimodal transportation and logistics needs. The company also said that TAGG provides scale to Hub’s logistics service offerings, with the expectation it will result in various complementary cross-selling opportunities for both Hub’s and TAGG’s customer bases.

Hub also noted that this deal serves as an important strategic milestone toward achieving Hub Group’s goal of $5.5-$6.5 billion of revenue by 2025.

“We are excited to welcome TAGG’s employees, customers and vendors to Hub Group,” said Hub Group Chairman and CEO David Yeager in a statement. “This acquisition advances our strategy to provide the industry’s premier supply chain solutions and expands our position in the long term, high growth e-commerce fulfillment sector.”

Robert W. Baird & Co. analyst Garrett Holland wrote in a research report that this acquisition further strengthens Logistics business and is consistent with HUBG’s M&A approach.

“The deal strengthens HUBG’s fulfillment solutions offering and further increases the non-asset based revenue concentration,” wrote Holland. “We expect solid execution similar to HUBG’s other recent transactions including Choptank (October 2021) and NonstopDelivery (December 2020). Prudent capital allocation and opportunistic M&A should continue.”

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BtoB Central Staff
BtoB Central Staff
Btobcentral is dedicated to business news.


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