Hub Group Acquires Fulfillment Solutions Provider Tagg Logistics

Hub Group, a provider of transportation and logistics management solutions, on Monday announced that it acquired e-commerce, business-to-business and omnichannel fulfillment company Tagg Logistics for $103 million in cash.

The acquisition will expand Hub Group's warehouse footprint from about 5 million square feet to over 9 million square feet. And by introducing a complementary e-commerce offering to its platform, the move bolsters the company's presence in the consolidation and fulfillment space.

Hub Group HUBG explained that the acquisition will go a long way toward helping the company meet its strategic milestones. That includes the goal of reaching $5.5 billion to $6.5 billion in revenue by 2025.

"We are excited to welcome Tagg's employees, customers and vendors to Hub Group," said Hub Group Chairman and CEO David Yeager. "This acquisition advances our strategy to provide the industry's premier supply chain solutions and expands our position in the long-term, high-growth e-commerce fulfillment sector."

Founded in 2006, Allentown, Pennsylvania-based Tagg has grown into a nationwide fulfillment provider with over 4 million square feet of warehouse space. Across its 18 facilities, the company has a total of approximately 800 employees. That large footprint allows Tagg to reach 99.7% of the U.S. population within two days.

"Our team is excited to join Hub Group," said Tagg founder and CEO Tod Yazdi. "We share similar values of service, integrity and innovation. We believe Hub Group's capabilities and reputation for excellence, combined with our nationwide facility footprint and delivery capabilities, will unlock significant value for our customers."

Hub Group granted contingent compensation to Tagg's senior management team in order to retain them within the business. With the additional employees, customers and vendors, Hub Group projects to generate $200 million in revenue in 2022. That glowing outlook comes amid a better-than-expected fiscal year for the company. In the first quarter, it blew away analyst expectations with strong financials and a full-year earnings projection that doubled Wall Street's expectations. The firm followed that up with an equally impressive performance in Q2 as it navigates the precarious transportation market.

Earlier this year, Hub Group landed on FreightWaves' Top 500 For-Hire Carriers list, ranking 29th in the country. And last month, the company was named to Inbound Logistics' Top 10 3PL list for 2022, the 15th straight year it has made the list.