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Acquisition | 6 Months Ended
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Jun. 30, 2024
Business Combinations [Abstract] |
Acquisition | NOTE 3. Acquisitions Forward Air Final Mile Acquisition On December 20, 2023, we acquired 100% of the equity interest of Forward Air Final Mile (“FAFM”). FAFM provides residential last mile delivery services and installation of big and bulky goods, with a focus on appliances, throughout the United States. Total consideration for the transaction was $257.2 million. $260.9 million was paid in cash in December 2023 while $3.7 million was received from the seller in the second quarter of 2024 as part of the post-closing true-up of net working capital. The financial results of FAFM, since the date of acquisition, are included in our Logistics segment. The FAFM acquisition expanded our final mile services to include the delivery and installation of appliances. FAFM provides residential last mile delivery services through a non-asset business model, working with a network of over 350 ca rriers throughout the country. The initial accounting for the acquisition of FAFM 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. Based on refined inputs incorporated into the fair market value calculations during the quarter ended June 30, 2024, we have estimated that the fair value of intangible assets totals $94.7 million as of December 20, 2023. This represents a $39.8 million decrease relative to the initial estimated fair value of the intangible assets and results in a corresponding increase to goodwill. The amounts recorded in the condensed consolidated financial statements related to the FAFM acquisition are preliminary pending finalization of the fair market value analyses, 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 20, 2023 |
Accounts receivable trade | $ | 28,355 |
Prepaid expenses and other current assets |  | 2,305 |
Property and equipment |  | 2,792 |
Right-of-use assets - operating leases |  | 15,258 |
Other intangibles |  | 94,700 |
Goodwill |  | 142,122 |
Other assets |  | 173 |
Total assets acquired | $ | 285,705 |
Accounts payable trade | $ | 155 |
Accounts payable other |  | 2,298 |
Accrued payroll |  | 1,271 |
Accrued other |  | 9,488 |
Lease liability - operating leases short-term |  | 5,697 |
Other long-term liabilities |  | 19 |
Lease liability - operating leases long-term |  | 9,560 |
Total liabilities assumed | $ | 28,488 |
Total consideration, net | $ | 257,217 |
Cash paid, net | $ | 257,217 |
The FAFM 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 condensed consolidated balance sheet at their estimated fair values as of December 20, 2023 with the remaining unallocated purchase price recorded as goodwill. The goodwill recognized in the FAFM 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 f ully tax deductible over a period of 15 years. The components of “Other intangibles” listed in the table above as of the acquisition date are preliminary and are pending finalization of the fair market valuations of the acquired intangibles. Amounts for these components are as follows (in thousands):
|  |  |  |  |  |  |  |  | Estimated
|  |  |  | Accumulated |  |  | Balance at |  | Useful
| Amount |  |  | Amortization |  |  | June 30, 2024 |  | Life
Customer relationships | $ | 92,500 |  |  | $ | 3,854 |  |  | $ | 88,646 |  | 13 years
Developed technology | $ | 1,200 |  |  | $ | 325 |  |  | $ | 875 |  | 2 years
Independent service provider network | $ | 1,000 |  |  | $ | 542 |  |  | $ | 458 |  | 1 year
The above intangible assets are amortized using the straight-line method. Amortization expense related to this acquisition was $1.7 million and $4.3 million for the three months and six months ended June 30, 2024, respectively. T he intangible assets have a remaining weighted average useful life of approximately 12.25 years. Amortization expense related to FAFM for the next five years is expected to be as follows (in thousands):
| Total |
2024 (Remainder of year) | $ | 4,316 |
2025 |  | 7,690 |
2026 |  | 7,115 |
2027 |  | 7,115 |
2028 |  | 7,115 |
FAFM's actual results are included in our condensed consolidated financial statements since the acquisition date of December 20, 2023. The following unaudited pro forma condensed consolidated results of operations present the effects of FAFM as though it had been acquired as of January 1, 2023 (in thousands, except for per share amounts):
| Three Months Ended |  |  | Six Months Ended |
| June 30, 2023 |  |  | June 30, 2023 |
Revenue | $ | 1,109,022 |  |  | $ | 2,330,644 |
Net income | $ | 46,953 |  |  | $ | 108,767 |
Earnings per share |  |  |  |  |
Basic | $ | 0.73 |  |  | $ | 1.68 |
Diluted | $ | 0.73 |  |  | $ | 1.67 |
The unaudited pro forma condensed consolidated results for the periods above were prepared using the acquisition method of accounting and are based on the historical financial information of Hub and FAFM. 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 condensed consolidated results are not necessarily indicative of what our condensed consolidated results of operations actually would have been had we completed the FAFM acquisition as of January 1, 2023.

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