Downers Grove, IL-based third-party logistics provider Hub Group is planning to buy Memphis, TN-based Comtrak—an $85 million company that offers rail and international drayage for the intermodal sector, full truckload transportation, container storage, yard management, truck brokerage and other logistics services.
Comtrak, established in 1983, employs 381 people and owns 15 terminals located primarily in the southeastern U.S., using both company drivers and third-party owner operators to serve its customers.
Hub said it’s paying $38 million in cash for Comtrak and expects to close the deal during the first quarter of 2006. David Yeager, Hub’s CEO, noted that the purchase price is subject to adjustment based on Comtrak’s working capital when the sale is finalized and that the deal provides for two cash payments, each of which will not exceed $5 million, to cover earnings generated in 2006 and 2007.
“We have worked with Comtrak for more than 20 years and believe this is the best drayage company in the country,” said Yeager. “This acquisition makes Hub a stronger company … as it’s consistent with our strategic plan to increase the amount of local trucking or drayage we perform. Also, Comtrak performs drayage for the international intermodal market, so it provides us with an immediate proven entry into this market.”