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Acquisitions
 6 Months Ended
Jun. 30, 2025
Business Combination [Abstract]  
Acquisitions

NOTE 3. Acquisitions

EASO Transaction

On October 23, 2024, we entered into an investment agreement with Corporación Interamericana de Logística, S.A. de C.V. and certain associated entities (commonly known as “EASO”), a family-led, intermodal and trucking logistics provider headquartered in Mexico City to acquire a controlling interest in EASO. EASO specializes in intermodal, dedicated trucking, truckload and freight brokerage services. Through a network of terminals across Mexico, EASO serves the entire Mexican domestic market and main logistics hubs in the U.S. using its intermodal cross-border network.

The estimated fair value of total consideration transferred was approximately $55 million for a 51% equity stake in EASO. The financial results of EASO, since the date of acquisition, are included in our ITS segment.

The EASO investment transaction expanded our intermodal and transportation solutions business. With a substantial increase in cross-border trade activity from nearshoring, this transaction improves our ability to provide a cross-border service offering and provides increased intermodal conversion opportunities.

The initial accounting for the EASO transaction 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 as well as non-controlling interests. In addition, we are in the preparation and review process of the valuation of certain acquired assets, liabilities, and non-controlling interest used in determining the purchase accounting. Finally, certain post-closing activities outlined in the investment agreement remain incomplete. As a result, the amounts recorded in the condensed consolidated financial statements related to the EASO transaction are preliminary and the measurement period remains open.

The following table summarizes the preliminary purchase price allocation to the assets acquired and liabilities assumed as of the date of the investment agreement (in thousands):

 

October 23, 2024

 

 

Cash and cash equivalents

$

2,018

 

 

Accounts receivable trade, net

 

15,138

 

 

Other receivables

 

8,258

 

 

Prepaid taxes

 

1,174

 

 

Prepaid expenses and other current assets

 

1,790

 

 

Property and equipment, net

 

20,275

 

 

Right-of-use assets - operating leases

 

1,647

 

 

Other intangibles

 

42,511

 

 

Goodwill

 

30,507

 

 

Other non-current assets

 

243

 

 

Deferred taxes

 

780

 

 

Total assets acquired

$

124,341

 

 

 

 

 

 

Accounts payable trade

$

9,976

 

 

Accounts payable other

 

3,844

 

 

Accrued payroll

 

1,273

 

 

Accrued other

 

841

 

 

Lease liability - operating leases (current)

 

336

 

 

Current portion of long-term debt

 

1,031

 

 

Long-term debt

 

2,017

 

 

Lease liability - operating leases (non-current)

 

1,311

 

 

Total liabilities assumed

$

20,629

 

 

 

 

 

 

Total purchase price allocation

$

103,712

 

 

Less: non-controlling interests

 

48,996

 

 

Consideration transferred for 51% ownership

 

54,716

 

 

Less: contingent consideration due to sellers

 

3,721

 

 

Cash contributed for 51% ownership

 

50,995

 

 

Less: cash and cash equivalents acquired

 

2,018

 

 

Less: deferred cash consideration

 

28,436

 

 

Cash paid, net

$

20,541

 

 

 

 

 

 

 

 

 

 

The following table summarizes the preliminary estimated acquisition date fair value of consideration transferred and purchase price allocation.

 

October 23, 2024

 

 

Cash

$

22,559

 

 

Deferred cash consideration

 

28,436

 

 

Contingent consideration

 

3,721

 

 

Total consideration transferred

 

54,716

 

 

Non-controlling interests

 

48,996

 

 

Total purchase price allocation

$

103,712

 

 

The EASO transaction was accounted for as a purchase business combination in accordance with ASC 805 “Business Combinations.” In connection with the transaction, we performed a consolidation analysis concluding that we control all EASO entities through either a majority voting interest or as the primary beneficiary of a variable interest entity. As a result, 100% of assets acquired, liabilities assumed and non-controlling interests were recorded in the accompanying Condensed Consolidated Balance Sheet at their preliminary estimated fair values as of October 23, 2024, with the remaining unallocated purchase price recorded as goodwill. The goodwill recognized in the EASO transaction was primarily attributable to potential expansion and future development of the business. This goodwill is not expected to be deductible for tax purposes.

Total consideration transferred includes $28.4 million of deferred cash consideration, all or a portion of which may be paid at least two years after the closing date of the transaction. As a result of the restrictions on this deferred consideration in the investment agreement, we have classified the associated cash as Restricted Cash in the accompanying Condensed Consolidated Balance Sheet. As of June 30, 2025, the balances of Deferred Consideration and Restricted Cash were $28.4 million and $26.6 million, respectively, on the Condensed Consolidated Balance Sheet.

Total consideration transferred includes $3.7 million of contingent consideration related to certain operating tax balances existing prior to the transaction for which we have agreed to reimburse the full amount of cash collected within two years of the closing date of the transaction. The estimated fair value of such contingent consideration is based on estimated collectability of such operating tax balances within the agreed timeframe.

Our investment in one of the EASO entities, Corporación Interamericana de Logística, S.A. de C.V. (“CIL”), qualifies as a Variable Interest Entity (“VIE”). Based on the rights provided in the investment and shareholder agreements, as well as the design of the VIE, our majority exposure to the variability associated with economic performance of the VIE, and the relationship and significance of activities of the VIE to us, we determined that we are most closely associated with the VIE and are therefore considered the primary beneficiary.

During a period from 2030 to 2032, Hub will have the right, but not the obligation, to purchase an amount of issued and outstanding shares of EASO such that, upon exercising this call right, we would own 80% of all of the issued and outstanding shares of EASO at a purchase price based on earnings multiples as defined in the shareholders agreement. We evaluated this call right and concluded that it does not meet the definition of a derivative, resulting in the non-controlling interest and embedded call right being classified as permanent equity.

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

 

Closing Date

 

 

Accumulated

 

 

Balance at

 

Estimated Useful

 

Amount

 

 

Amortization

 

 

June 30, 2025

 

Life

Customer relationships

$

33,018

 

 

$

1,512

 

 

$

31,506

 

15 years

Trade name

 

9,493

 

 

 

326

 

 

 

9,167

 

20 years

   Subtotal

$

42,511

 

 

$

1,838

 

 

 

40,673

 

 

Effect of translation

 

 

 

 

 

 

 

2,169

 

 

   Ending Balance

 

 

 

 

 

 

$

42,842

 

 

 

The above intangible assets are amortized using the straight-line method. Amortization expense related to the intangible assets acquired with this transaction was $0.4 million and $1.2 million for the three months and six months ended June 30, 2025, respectively. The intangible assets have a weighted average useful life of approximately 15.46 years as of June 30, 2025.

Amortization expense related to EASO investment agreement for the next five years is estimated as follows (in thousands):

 

 

Total

 

2025 (Remainder of year)

 

$

1,341

 

2026

 

 

2,681

 

2027

 

 

2,681

 

2028

 

 

2,681

 

2029

 

 

2,681

 

The following table presents the total carrying amount of goodwill by segment (in thousands):

 

 

ITS

 

Logistics

 

Total

 

Balance at December 31, 2024

 

$

413,745

 

$

400,564

 

$

814,309

 

Adjustments

 

 

(12,891

)

 

-

 

 

(12,891

)

Currency translation adjustment

 

 

2,601

 

 

-

 

 

2,601

 

Balance at June 30, 2025

 

$

403,455

 

$

400,564

 

$

804,019

 

 

The changes noted as "Adjustments" in the above table refer to preliminary purchase accounting adjustments related to the EASO acquisition recorded during the three month period ending June 30, 2025, primarily related to the increase in the valuation of intangibles for $5.9 million and the increase in valuation of property, plant, and equipment for $4.5 million.