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Acquisitions | 12 Months Ended
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Dec. 31, 2020
Business Combinations [Abstract] |
Acquisitions | NOTE 5. Acquisitions NonstopDelivery, LLC Acquisition On December 9, 2020, we acquired 100% of the equity interest of NSD. Total consideration for the transaction was $103.3 million which consisted of cash paid of $89.7 million and the settlement of Hub’s accounts receivable due from NSD of $13.6 million. The acquisition of NSD expanded our logistics service offering to include last mile logistics. NSD provides residential last mile delivery services through a non-asset business model, working with a network of over 170 carriers throughout the country. The financial results, since the acquisition date, of NSD are included in our logistics line of business. The initial accounting for the acquisition of NSD is incomplete as we, with the support of our valuation specialist, are 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 acquisition agreement remain incomplete. As a result, the amounts recorded in the consolidated financial statements related to the NSD acquisition are preliminary and 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 9, 2020 |  |
Cash and cash equivalents | $ | 4,829 |  |
Accounts receivable trade |  | 26,250 |  |
Prepaid expenses and other current assets |  | 207 |  |
Property and equipment |  | 2,907 |  |
Right of use assets - operating leases |  | 1,105 |  |
Goodwill, net |  | 24,315 |  |
Other intangibles |  | 56,736 |  |
Other assets |  | 42 |  |
Total assets acquired | $ | 116,391 |  |
Accounts payable trade | $ | 9,972 |  |
Accrued payroll |  | 1,324 |  |
Accrued other |  | 578 |  |
Lease liability - operating leases |  | 364 |  |
Lease liability - financing leases |  | 864 |  |
Total liabilities assumed | $ | 13,102 |  |
Total consideration | $ | 103,289 |  |
Cash paid, net | $ | 84,845 |  |
The NSD 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 9, 2020 with the remaining unallocated purchase price recorded as goodwill. The goodwill recognized in the NSD acquisition was primarily attributable to potential expansion and future development of the acquired business. Tax history and attributes are not inherited in an equity purchase of this kind, however, the goodwill and other intangibles recognized in this purchase will be fully tax deductible over a period of 15 years. We incurred approximately $1.0 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 year ended December 31, 2020. 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, 2020 |  |  | Life
Customer relationships | $ | 52,683 |  |  | $ | 293 |  |  | $ | 52,390 |  |  | 15 years
Agent relationships | $ | 2,432 |  |  | $ | 51 |  |  | $ | 2,381 |  |  | 4 years
Trade name | $ | 1,621 |  |  | $ | 90 |  |  | $ | 1,531 |  |  | 18 months
The above intangible assets are amortized using the straight-line method. Amortization expense related to this acquisition for the year ended December 31, 2020 was $0.4 million. The intangible assets have a weighted average useful life of approximately 14.08 years. From the date of the acquisition through December 31, 2020, NSD’s revenue was $10.2 million and operating income was $0.9 million. CaseStack Acquisition On December 3, 2018, we completed the CaseStack Acquisition. Total consideration for the transaction was $252.9 million, which included $249.4 million in cash, of which $248.7 million was paid in December 2018 and $0.7 million in April 2019. There was also a deferred purchase consideration of $3.5 million. The deferred purchase consideration was paid equally over the twenty-four months following the transaction. Prior to being paid, it was included in Accrued Other in our Consolidated Balance Sheets. The CaseStack Acquisition expanded our logistics service offering to include transportation and warehousing consolidation solutions for consumer goods companies selling into the North American retail channel. The transaction 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 | $ | 249,389 |
Deferred purchase consideration |  | 3,469 |
Total consideration | $ | 252,858 |
The following table summarizes the allocation of the total consideration to the assets acquired and liabilities assumed as of the date of the acquisition (in thousands):
Accounts receivable trade | $ | 31,896 |
Prepaid expenses and other current assets |  | 694 |
Property and equipment |  | 3,247 |
Deferred tax assets |  | 6,433 |
Goodwill, net |  | 166,070 |
Other intangibles |  | 75,600 |
Other assets |  | 120 |
Total assets acquired | $ | 284,060 |
Accounts payable trade | $ | 24,542 |
Accrued payroll |  | 2,811 |
Accrued other |  | 3,849 |
Total liabilities assumed | $ | 31,202 |
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 transaction 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 prior to the closing date that are reflected in general and administrative expense in the accompanying Consolidated Statements of Income for the year ended December 31, 2018. From the date of the transaction through December 31, 2018, CaseStack’s revenue was $20.8 million and operating income was $0.7 million. The following unaudited pro forma consolidated results of operations presents the effects of NSD as though it had been acquired as of January 1, 2019 and CaseStack as though it had been owned as of January 1, 2018 (in thousands, except for per share amounts):
| Twelve Months Ended |
| December 31, 2020 |  |  | December 31, 2019 |  |  | December 31, 2018 |
Revenue | $ | 3,584,538 |  |  | $ | 3,733,507 |  |  | $ | 3,912,745 |
Income from continuing operations | $ | 84,874 |  |  | $ | 107,998 |  |  | $ | 133,310 |
Earnings per share (1) |  |  |  |  |  |  |  |  |  |  |
Basic | $ | 2.56 |  |  | $ | 3.24 |  |  | $ | 2.81 |
Diluted | $ | 2.53 |  |  | $ | 3.23 |  |  | $ | 2.79 |
| (1) | Earnings per share is from continuing operations.
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, NSD 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 NSD acquisition on January 1, 2019 and CaseStack 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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