v3.26.1
Note 13 - Acquisition of Assets of Brokerage Business Operating as Star Logistics Solutions
 6 Months Ended
Jun. 30, 2026
Star Logistics Solutions [Member]  
Notes to Financial Statements  
Business Combination [Text Block]

Note 13.

Acquisition of Assets of Brokerage Business Operating as Star Logistics Solutions

 

On October 10, 2025, we acquired the assets of a truckload brokerage business, which we are operating as Star. Star operates in the consumer retail and disaster relief sectors where we historically have lacked exposure. Additionally, the disaster recovery market is highly specialized and synergistic with our Expedited business and offers occasional, high volume and high margin opportunities. The acquisition date fair value of the consideration transferred was $27.1 million. The Asset Purchase Agreement contains customary representations, warranties, covenants, and indemnification provisions. The Asset Purchase Agreement includes an earnout component based on Star's average adjusted earnings before interest, taxes, depreciation, and amortization reported for the three years ended December 31, 2028 with potential advance payments based on Star's adjusted earnings before interest, taxes, depreciation, and amortization reported for each of the years ended December 31, 2026 and 2027. The total purchase price, including any earnout achieved, is expected to be approximately $27.2 million depending on the results achieved by Star.

 

The acquisition date fair value of the consideration transferred consisted of the following:

  

October 10, 2025

 

(in thousands)

    

Cash paid pursuant to Asset Purchase Agreement

 $27,053 

Contingent consideration

  159 

Net purchase price

 $27,212 

 

We estimated the fair value of the contingent consideration using a probability-weighted model. This fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement. Refer to Note 3, "Fair Value of Financial Instruments" for information regarding changes in the contingent consideration arrangement.

 

All goodwill related to the acquisition is deductible for tax purposes, and there are no deferred income taxes arising from the acquisition.

 

The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date.

  

October 10, 2025

 

Accounts receivable

 $10,316 

Driver advances and other receivables

  707 

Inventory and supplies

  16 

Prepaid expenses

  428 

Other short-term assets

  250 

Net property and equipment

  2,169 

Other intangibles, net

  15,050 

Total identifiable assets acquired

  28,936 
     

Accounts payable

  (10,004)

Accrued expenses

  (2,235)

Current maturities of long-term debt

  (240)

Current portion of operating lease obligations

  (584)

Current portion of insurance and claims accrual

  (258)

Long-term portion of operating lease obligations

  (560)

Total liabilities assumed

  (13,881)

Net identifiable assets acquired

  15,055 

Goodwill

  12,157 

Net assets acquired

 $27,212 

 

Since acquisition we recognized measurement period adjustments which increased goodwill recognized for LTST by $0.1 million as of June 30, 2026 primarily related to uncollectible accounts receivable. Goodwill and other intangible assets  may change upon the finalization of the valuation of the contingent consideration liability and intangible assets as part of the purchase accounting for the acquisition. The goodwill recognized is attributable primarily to expected cost synergies as a result of overhead support. Refer to Note 11, "Goodwill, Intangibles, and Other Assets" for a summary of changes to goodwill during the period as well as information related to the identifiable intangible asset acquired.

 

Star’s results have been included in the consolidated financial statements since the date of acquisition and are reported within our Managed Freight reportable segment. 

 
The following unaudited pro forma consolidated results of operations assume that the acquisition of Star occurred as of January 1, 2025:

 

(in thousands)

                
  

Three months ended

  

Six months ended

 
  

June 30, 2026

  

June 30, 2025

  

June 30, 2026

  

June 30, 2025

 

Total revenue

 $332,873  $330,594  $640,034  $632,387 

Net income

 $8,535  $9,079  $12,955  $16,044 

Basic net income per share

 $0.34  $0.35  $0.52  $0.61 

Diluted net income per share

 $0.32  $0.33  $0.49  $0.58 

 

The pro forma financial information for all periods presented above has been calculated after adjusting the results of Star to reflect the business combination accounting effects resulting from this acquisition, including the amortization expense from acquired intangible assets as though the acquisition occurred as of the beginning of the Company’s fiscal year 2025. As noted above, the allocation is preliminary and changes to the value of the contingent consideration and finalization of our valuation could result in changes to the amount of amortization expense from acquired intangible assets included in the pro forma financial information presented above. The Company's historical consolidated financial statements have been adjusted in the pro forma combined financial statements to give effect to pro forma events that are directly attributable to the business combination and factually supportable. The pro forma financial information is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of 2025.