Hub Group Trucking, Inc. (“HGT”), a wholly owned subsidiary of Hub Group, Inc., acquired all of the outstanding equity interests of Estenson Logistics, LLC (“Estenson”) on July 1, 2017 (the “Estenson Acquisition”). Estenson is now our wholly owned subsidiary, operating under the name Hub Group Dedicated (“Dedicated”). As a result of the Estenson Acquisition, HGT acquired substantially all of the assets of Estenson, which include tractors and trailers, as well as assumed certain liabilities, including equipment debt.

Dedicated has an operating fleet of approximately 1,400 tractors and 4,500 trailers. Dedicated services have been requested by our customers and we believe Dedicated is an excellent service offering that we can provide to our customers.

The base purchase price for Estenson was approximately $284.7 million, including contingent consideration related to an earn-out provision included in the Estenson Acquisition purchase agreement, which will not exceed $6.0 million and is based on Estenson’s EBITDA results through June 30, 2019. In accordance with the agreement, the base purchase price was adjusted by the assumed debt to arrive at the final consideration of $172.0 million. To facilitate the Estenson Acquisition, we assumed $112.7 million of Estenson debt and paid $165.9 million in cash, including $55.0 million of cash which was borrowed under our credit agreement.

The following table summarizes the total purchase price allocated to the net assets acquired (in thousands):

Cash paid	$	165,945
Consideration payable		1,366
Contingent consideration, fair value		4,703
Total consideration		172,014
Equipment debt assumed		112,677
Total base purchase price	$	284,691

The following table summarizes the preliminary allocation of the total consideration to the assets acquired and liabilities assumed as of the date of the acquisition (in thousands):

	July 1, 2017
Cash and cash equivalents	$	12
Accounts receivable trade		26,830
Other receivables		165
Prepaid expenses and other current assets		1,500
Property and equipment		128,477
Other intangibles		66,400
Goodwill		86,504
Other assets		64
Total assets acquired	$	309,952

Accounts payable trade	$	4,542
Accrued payroll		5,661
Accrued other		15,058
Equipment debt		112,677
Total liabilities assumed	$	137,938

Total consideration	$	172,014

The Estenson Acquisition was accounted for as a purchase business combination in accordance with ASC 805 “Business Combinations.” Assets acquired and liabilities assumed were recorded in the accompanying consolidated balance sheet at their estimated fair values as of July 1, 2017 with the excess of purchase price over fair value of net assets acquired recorded as goodwill. The goodwill recognized in the Estenson acquisition was primarily attributable to potential expansion and future development of the acquired business. The fair value assigned to the customer relationships identifiable intangible was determined using an income approach based on management’s estimates and assumptions. The fair value assigned to the property and equipment was determined based on a market approach. A probability weighted expected return model was used to estimate the value of the contingent consideration., see Note 9 for more information. Equipment debt was valued using a discounted cash flow analysis whereby future contractual principal repayments and interest payments for each instrument were discounted to the purchase date at a risk-adjusted discount rate.

We incurred approximately $1.6 million of acquisition costs associated with this transaction prior to the closing date that are reflected in general and administrative expense in the accompanying Consolidated Statements of Income for the twelve months ended December 31, 2017.

On December 3, 2018, a subsidiary of Hub Group, Inc. closed on the Agreement and Plan of Merger (the “Merger Agreement”) to acquire CaseStack, Inc. (“CaseStack”). Total consideration for the transaction was $252.1 million. To facilitate the acquisition we paid $248.7 million in cash and $3.5 million was a deferred purchase consideration. The deferred purchase consideration is included in Accrued Other and will be paid equally over twenty-four months.

The acquisition of CaseStack expanded our logistics service offering to include transportation and warehousing consolidation solutions for consumer packaged goods companies selling into the North American retail channel. The acquisition also added scale to our truck brokerage service offering, particularly in the less-than-truckload segment of the market.

The following table summarizes the total purchase price allocated to the net assets acquired (in thousands):

The initial accounting for the acquisition of CaseStack is incomplete as we, with the support of our valuation specialist, are still in the process of finalizing the fair market value calculations of the acquired net assets. In addition, the Company is in the preparation and final review process of the applicable future cash flows used in determining the purchase accounting. Finally, certain post-closing activities outlined in the merger agreement need to be completed. As a result, the amounts recorded in the consolidated financial statements related to the CaseStack merger are preliminary the measurement period remains open. The following table summarizes the preliminary allocation of the total consideration to the assets acquired and liabilities assumed as of the date of the acquisition (in thousands):

	December 3, 2018
Accounts receivable trade	$	32,057
Prepaid expenses and other current assets		694
Property and equipment		3,247
Deferred tax assets		6,433
Goodwill, net		164,976
Other intangibles		75,600
Other assets		120
Total assets acquired	$	283,127

Accounts payable trade	$	24,541
Accrued payroll		2,811
Accrued other		3,650
Total liabilities assumed	$	31,002

Total consideration	$	252,125

The CaseStack acquisition was accounted for as a purchase business combination in accordance with ASC 805 “Business Combinations.” Assets acquired and liabilities assumed were recorded in the accompanying consolidated balance sheet at their estimated fair values as of December 3, 2018 with the remaining unallocated purchase price recorded as goodwill. The goodwill recognized in the CaseStack acquisition was primarily attributable to potential expansion and future development of the acquired business.

Tax history and attributes including net operating loss carryovers and other deferred tax assets are inherited in an equity purchase such as this, while goodwill is not tax deductible.

We incurred approximately $1.4 million of transaction costs associated with this transaction prior to the closing date that are reflected in general and administrative expense in the accompanying Consolidated Statements of Income for the twelve months ended December 31, 2018.

The components of “Other intangibles” listed in the above table as of the acquisition date are preliminarily estimated as follows (in thousands):

			Accumulated		Balance at		Estimated Useful
	Amount		Amortization		December 31, 2018		Life
Customer relationships - logistics services	$	65,600	$	547	$	65,053	10 years
Customer relationships - transportation services	$	8,700	$	145	$	8,555	5 years
Trade name	$	1,300	$	72	$	1,228	18 months

The above intangible assets are amortized using the straight -line method. Amortization expense related to this acquisition for the twelve month period ended December 31, 2018 was $0.8 million. The intangible assets have a weighted average useful life of approximately 9 years. Amortization expense related to CaseStack for the next five years is as follows (in thousands):

	Total
2019	$	9,167
2020	$	8,661
2021	$	8,300
2022	$	8,300
2023	$	8,155

From the date of the acquisition through December 31, 2018, CaseStack’s revenue was $20.8 million and operating income of $0.7 million.

The following unaudited pro forma consolidated results of operations presents the effects of CaseStack as though it had been acquired as of January 1, 2017 and Dedicated as though it had been acquired as of January 1, 2016 (in thousands, except for per share amounts):

	Twelve Months Ended
	December 31, 2018		December 31, 2017		December 31, 2016
Revenue	$	3,912,745	$	3,449,373	$	2,965,032
Income from continuing operations	$	133,310	$	122,532	$	64,825
Earnings per share (1)
Basic	$	2.81	$	3.69	$	1.91
Diluted	$	2.79	$	3.67	$	1.90

The unaudited pro forma consolidated results for the annual periods were prepared using the acquisition method of accounting and are based on the historical financial information of Hub, Dedicated and CaseStack. The historical financial information has been adjusted to give effect to the pro forma adjustments that are: (i) directly attributable to the acquisition, (ii) factually supportable and (iii) expected to have a continuing impact on the combined results. The unaudited pro forma consolidated results are not necessarily indicative of what our consolidated results of operations actually would have been had we completed the acquisition on January 1, 2017 and January 1, 2016, respectively.