Hub Group expands with Choptank acquisition

Hub Group recently acquired Choptank Transport, a provider of non-asset refrigerated transportation solutions.

Since its founding in 2000, Choptank has achieved one of the fastest growth rates in the industry with its expansive network of more than 20,000 carriers throughout North America, specializing in chilled and frozen solutions, the company said. The acquisition bolsters Hub Group’s presence in the refrigerated transportation space and adds a complementary offering to serve its customers' multimodal transportation and logistics needs.

Hub Group said the addition of Choptank is an important milestone in its goal of achieving more than $6 billion in revenue by 2025.

“We are excited to welcome Choptank’s employees, customers, and carriers to Hub Group,” said David Yeager, Hub Group chairman and CEO. “This acquisition delivers on our strategy to provide the industry’s premier supply chain solutions, and will advance our position in the growing cold-chain segment.”

Cash consideration for the transaction of $130 million was funded by cash on hand.

In connection with the acquisition, Hub Group granted contingent compensation to the owners and senior management team of Choptank to incentivize their retention and drive continued growth of the business.

Choptank expects to generate more than $450 million of annual revenue in 2021.

The acquisition enhances Hub’s over-the-road refrigerated transportation solutions offering, and complements its growing fleet of 450 refrigerated intermodal containers. Hub Group said it intends to further invest in its refrigerated transportation by purchasing 550 intermodal reefer containers in 2022, bringing the size of its fleet to 1,000 units.

Choptank adds scale to Hub’s brokerage service line, with combined revenue of more tan $1 billion across dry van, refrigerated, and LTL freight expected for 2021. The acquisition is expected to result in many complementary cross-selling opportunities for Hub’s and Choptank’s customer bases. With this transaction, Hub’s non-asset business lines will contribute more than 40% of total revenue, the company added.

In addition to its carrier network, Choptank’s 400 employees will join Hub Group. The company has developed a proprietary technology platform that Hub will leverage to enhance its brokerage operation.

“Our team is excited to join Hub Group,” said Geoff Turner, Choptank CEO. “We share similar values of service, integrity and innovation, which we are excited to bring together to fuel our continued growth. Choptank brings our wealth of industry experience, a strong carrier network, and innovative technology that, when combined with the industry presence and reputation of Hub Group, will unlock value for our customers and move our business forward.”