Hudson Capital Inc. has entered into a definitive merger agreement to acquire FreightHub, Inc. (Fr8Hub), a North American transportation logistics platform company focused on US-Mexico cross-border shipping. Existing Fr8Hub shareholders intend to invest $12 million in connection with the closing of the transaction. The transaction is expected to close in the first quarter of 2021.
Fr8Hub is simplifying domestic and international cross-border shipping through its cloud-based transportation logistics platform. The company’s digital freight marketplace, transportation management systems (TMS), public application programming interface (API), and customer support tools have been designed to maximize efficiency from scheduling to delivery for shippers and carriers. Fr8Hub’s innovative digital freight matching technology connects shippers with a broad network of reliable carriers and drivers in Mexico, Canada and the United States’ borders. The company’s proprietary platform enables shippers to autonomously manage their own fleet and post loads in the marketplace to minimize dead space and, at the same time, seamlessly integrate with third-party systems to streamline communication amongst partners. Altogether, Fr8Hub’s mission is to make shipping simple, transparent, and efficient.
Hon Man Yun, Chief Financial Officer of Hudson Capital, stated, “With its differentiated technology platform, first mover advantage and extensive management experience and expertise, Fr8Hub is well positioned to capitalize on the expanding truckload freight industry cross-border between the United States and Mexico. After three years of innovative software development, the company began selling Fr8Hub 2.0 in earnest in June. Since that time, they have seen extraordinary month-over-month revenue growth.”
With Fr8Hub 2.0 software in place, Fr8Hub’s monthly revenue grew from $247,000 in May 2020 to over $1.0 million in September 2020. With this press release, Fr8Hub management is providing full year 2020 revenue guidance to be in excess of $9 million.
Yun added, “Fr8Hub’s President Mike Flinker has more than 30 years of logistics business experience with a focus on cross-border and domestic commercial freight. Fr8Hub plans to build upon its market-leading transportation logistics platform, leveraging its innovative, proprietary technology and significant industry expertise.”
Flinker said, “We believe we are the first mover in Mexico to combine a top-tier transportation logistics platform with an intimate knowledge of over the road cross-border shipping, especially in relation to the US-Mexico border. Being a publicly traded company will enable us to build a market leading position serving the $40 billion trucking industry in Mexico. Mexico is now the United States’ second largest trading partner, with cross-border trading between the two countries totaling approximately $429 billion, according to the United States Department of Transportation. As an established digital freight marketplace broker, we are well-positioned for growth domestically in both countries, beginning in Mexico, where the fragmented industry provides a great opportunity for consolidation. Additionally, we plan to leverage our technology to expand our shipper TMS to include a carrier fleet management system and last mile solution. These growth initiatives help substantiate the basis for our revenue earnout targets.”
Fr8Hub has exhibited month-over-month revenue growth while introducing its next generation of software, Fr8Hub 2.0, and further establishing the company amongst its peers in the digital freight sector, including Uber Freight LLC, Convoy Inc, Transfix, Inc, and NEXT Trucking Inc.
The merger agreement includes a revenue earnout schedule. The following shows the 2020 guided revenue and the 2021, 2022, and 2023 revenue earnouts targets: