OAK BROOK, Ill., Aug. 31, 2018 (GLOBE NEWSWIRE) -- Hub Group, Inc. (“Hub Group”) (NASDAQ: HUBG), one of the nation’s leading freight transportation management companies, today entered into a definitive agreement and concurrently sold its subsidiary, Mode Transportation, LLC (“Mode”), to an affiliate of York Capital Management (“York”) for approximately $238.5 million. The transaction is a result of the previously announced exploration of strategic alternatives for Mode that was undertaken by the Hub Group Board of Directors as part of their ongoing review of alternatives for creating shareholder value. The sale does not include the Temstar business which is being retained by Hub Group and was previously included in the Mode segment for financial reporting purposes. The purchase price is subject to certain post-closing adjustments.
“Mode has an excellent management team, with a strong, solid agent base and loyal customers. While Mode has been very successful, there was a lack of strategic alignment with Hub’s centralized business model. The talented Mode team, combined with York’s expertise and significant resources, positions Mode well for realizing the next chapter of its growth,” said David Yeager, Hub Group Chairman and Chief Executive Officer.
Jim Damman, President of Mode, said, “Mode is an exceptional agent-based transportation solutions provider differentiated by customer-specific expertise, offerings across all modes of freight transportation and leading edge technology and analytics. We are excited about joining forces with York and the support they will provide as we execute our growth plan. We look forward to continuing to serve our agent, customer and carrier community.”
The sale price is equal to approximately 10x Mode’s adjusted EBITDA for the 12 months ended June 30, 2018, including certain incremental stand-alone expenses and excluding the results of the Temstar business. Cash proceeds will be used for acquisitions of businesses in both new and existing service lines. 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.
Moelis & Company LLC and Winston & Strawn LLP acted as advisor and legal counsel, respectively to Hub Group on the transaction. Kirkland & Ellis LLP served as counsel to York on the transaction.
CERTAIN FORWARD-LOOKING STATEMENTS: Statements in this press release that are not historical, including statements about Hub Group's or management's earnings guidance, intentions, beliefs, expectations, representations, projections, plans or predictions of the future, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are inherently uncertain and subject to risks, and should be viewed with caution. Forward-looking statements may contain words such as “expects”, “expected”, “believe”, “projected”, “estimate”, or similar words, and are based on management's experience and perception of historical trends, current conditions, and anticipated future developments, as well as other factors believed to be appropriate. We believe these statements and the assumptions and estimates contained in this release are reasonable based on information that is currently available to us. Such statements should be viewed with caution. Actual results or experience could differ materially from the forward-looking statements as a result of many factors. Factors that could cause actual results to differ materially include the factors listed from time to time in Hub Group's SEC reports including, but not limited to, the annual report on Form 10-K for the year ended December 31, 2017 and the quarterly report on Form 10-Q for the quarters ended March 31, 2018 and June 30, 2018. Hub Group assumes no liability to update any such forward-looking statements.
ABOUT HUB GROUP: Hub Group, Inc. is a publicly traded transportation management company that provides multi-modal solutions throughout North America, including intermodal, truck brokerage, dedicated and logistics services. Hub Group’s organization of over 4,000 employees delivers innovative, customer-focused solutions and industry leading service to help customers better control supply chains and their costs. For more information, visit www.hubgroup.com.
ABOUT MODE TRANSPORTATION: Mode Transportation is a non-asset based third-party logistics company focused on delivering truckload, less-than-truckload, intermodal, rail, ocean, air and managed transportation services. Mode Transportation operates across North America, primarily through a highly qualified network of independent business owners. Mode Transportation is headquartered in Dallas, Texas. For more information, visit www.modetransportation.com.
ABOUT YORK CAPITAL MANAGEMENT: York Capital Management is a global private investment firm that was established in 1991. The firm manages approximately $18 billion in assets across public and private investment strategies, including its private equity platform, the York Special Opportunities Fund, which owns Mode. York Capital employs approximately 60 investment professionals and 200 total employees globally, primarily in New York, London and Hong Kong.
Hub Media Contact: Maralee Volchko; 1-630-271-3745 / email@example.com
Mode Transportation Media Contact: Amy Nash; 1-214-445-5205 / firstname.lastname@example.org
York Media Contact: Gasthalter & Co; Nathaniel Garnick/Kevin FitzGerald 212-257-4170 email: email@example.com