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Acquisition | 3 Months Ended
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Mar. 31, 2019
Business Combinations [Abstract] |
Acquisition | NOTE 2.Acquisition 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 $252.9 million. To facilitate the acquisition we paid $248.7 million in cash, $3.5 million was a deferred purchase consideration and $0.7 million was a working capital adjustment that was paid in cash in April 2019. The deferred purchase consideration is included in Accrued Other in our consolidated balance sheet and is being 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):
Cash paid | $ | 248,656 |
Deferred purchase consideration |  | 3,469 |
Working capital adjustment |  | 733 |
Total consideration | $ | 252,858 |
The initial accounting for the acquisition of CaseStack remains 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 as 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):
Accounts receivable trade | $ | 31,917 |
Prepaid expenses and other current assets |  | 694 |
Property and equipment |  | 3,247 |
Deferred tax assets |  | 6,433 |
Goodwill |  | 165,943 |
Other intangibles |  | 75,600 |
Other assets |  | 120 |
Total assets acquired | $ | 283,954 |
Accounts payable trade | $ | 24,542 |
Accrued payroll |  | 2,811 |
Accrued other |  | 3,743 |
Total liabilities assumed | $ | 31,096 |
Total consideration | $ | 252,858 |
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. 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 |  |  | March 31, 2019 |  |  | Life
Customer relationships - logistics services | $ | 65,600 |  |  | $ | 2,187 |  |  | $ | 63,413 |  |  | 10 years
Customer relationships - transportation services | $ | 8,700 |  |  | $ | 580 |  |  | $ | 8,120 |  |  | 5 years
Trade name | $ | 1,300 |  |  | $ | 289 |  |  | $ | 1,011 |  |  | 18 months
The above intangible assets are amortized using the straight-line method. Amortization expense related to this acquisition for the three month period ended March 31, 2019 was $2.3 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 |
Remainder 2019 |  | $ | 6,875 |
2020 |  | $ | 8,661 |
2021 |  | $ | 8,300 |
2022 |  | $ | 8,300 |
2023 |  | $ | 8,155 |
The following unaudited pro forma consolidated results of operations presents the effects of CaseStack as though it had been acquired as of January 1, 2018 (in thousands, except for per share amounts):
| Three Months Ended |
| March 31, 2018 |
Revenue | $ | 898,019 |
Income from continuing operations | $ | 13,315 |
Earnings per share (1) |  |  |
Basic | $ | 0.40 |
Diluted | $ | 0.40 |
| (1) | Earnings per share is from continuing operations.
The unaudited pro forma consolidated results for the periods shown were prepared using the acquisition method of accounting and are based on the historical financial information of Hub 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, 2018.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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- References No definition available. + Details
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