“We are excited to more than double Hub Group’s temperature-controlled container fleet,” said CEO Phil Yeager. (Hub Group)
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Hub Group bought the intermodal division of Marten Transport for $51.8 million in cash, the companies said.
The deal, which Hub Group expects to more than double the size of its temperature-controlled intermodal fleet, is set to close by the end of the third quarter.
Marten Intermodal has around 100 customers in the food and beverage segments for its temperature-controlled intermodal services.
Oak Brook, Ill.-based Hub Group ranks No. 2 among intermodal carriers and No. 14 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.
“We are excited to more than double Hub Group’s temperature-controlled container fleet and leverage our existing intermodal network to serve Marten Intermodal’s customers,” said CEO Phil Yeager.
“This opportunity aligns with our long-term investment strategy, expands margin and preserves capital flexibility. We are committed to sustaining the strong service and growth momentum of our leading temperature-controlled intermodal offering,” the company’s top executive said.
The deal is set to close by the end of the third quarter. (Hub Group)
Hub Group noted in an investor presentation that refrigerated intermodal outperformed its peers across the freight landscape through the ongoing cyclical downturn, reflecting healthy shipper demand.
Refrigerated intermodal pricing and margin per load are higher relative to non-temperature-controlled alternatives, it added.
Marten Transport launched its intermodal business in 2005 and operates about 1,200 refrigerated containers.
The division generated $51.5 million of revenue in the 12 months that ended June 30.
Hub Group said the deal would leverage its existing intermodal network and operate under Hub Group’s current rail contracts and chassis agreements.
In addition, Hub Group will now be able to offer refrigerated intermodal services in Mexico to customers after the close of the deal with the acquisition of the extra rolling stock.
Truckload carrier Marten expects the transaction to allow the Mondovi, Wis.-based company to concentrate on its core business.
Marten Transport operates about 1,200 refrigerated containers. (drive4marten.com)
“We have worked to bring clarity and focus to our integrated business strategy, and this transaction is a reflection of that process. We look forward to investing in and positioning our core operations to capitalize on profitable organic growth opportunities,” said Executive Chairman Randolph Marten.
Marten’s core businesses comprise: temperature-sensitive truckload, dry truckload, dedicated services, brokerage and MRTN de Mexico.
Marten Transport ranks No. 5 among refrigerated carriers, No. 17 among intermodal carriers and No. 46 on the for-hire TT100.
Deutsche Bank’s Richa Harnain noted the acquisition was relatively small but had the potential to be strategically significant.
Hub Group’s decision to increase the size of its refrigerated intermodal unit would introduce more fast-growing revenue tied to specialized refrigerated services into the company’s portfolio, Harnain said in a research note.
The deal also may unlock greater synergies than initially anticipated, due to minimal customer overlap, which provides greater opportunities for cross selling, she wrote.
Hub Group is set to report second-quarter earnings July 31. The company reported full-year 2024 revenue of $4 billion, 55% of which was from its intermodal and transportation solutions division and 45% from its logistics division.
Marten is scheduled to report Q2 earnings Aug. 16.
