On August 22, 2022, we acquired 100% of the equity interests of TAGG Logistics, LLC (“TAGG”), a provider of e-commerce, B2B and omnichannel fulfillment solutions, including warehousing and transportation services. Total consideration for the transaction was $103.4 million. $103.5 million was paid in cash during the third quarter of 2022 while $0.1 million is due back from the seller in the first quarter of 2023 as part of the post-closing true-up.

TAGG is a nationwide provider with over 4 million square feet of warehousing space throughout the United States allowing for responsive e-commerce and B2B fulfillment services. The acquisition improved our presence in the consolidation and fulfillment space and added a complementary e-commerce offering to serve our customers' multimodal transportation and logistics needs. The acquisition added scale to our logistics service line and has resulted in complementary cross-selling opportunities.

The initial accounting for the acquisition of TAGG 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 including the review of the applicable future cash flows used in determining the purchase accounting. As a result, the amounts recorded in the consolidated financial statements related to the TAGG acquisition are preliminary and the measurement period remains open. The following table summarizes the preliminary allocation of the total purchase consideration to the net assets acquired and liabilities assumed as of the date of the acquisition (in thousands):


	August 22, 2022
Cash and cash equivalents	$	839
Accounts receivable trade		24,409
Prepaid expenses and other current assets		2,024
Property and equipment		6,453
Right of use assets - operating leases		56,689
Other intangibles		27,300
Goodwill		52,062
Other assets		1,705
Total assets acquired	$	171,481

Accounts payable trade	$	9,497
Accrued payroll		2,500
Accrued other		1,373
Lease liability - operating leases short-term		14,465
Lease liability - operating leases long-term		40,254
Total liabilities assumed	$	68,089

Total consideration	$	103,392

Cash paid, net	$	102,661

The TAGG 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 consolidated balance sheet at their estimated fair values as of August 22, 2022 with the remaining unallocated purchase price recorded as goodwill. The goodwill recognized in the TAGG 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 fully tax deductible over a period of 15 years.

We incurred approximately $3.1 million of transaction costs associated with this transaction prior to the closing date that are reflected in general and administrative expense in the accompanying Consolidated Statements of Income for the year ended December 31, 2022.

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


			Accumulated		Balance at		Estimated Useful
	Amount		Amortization		December 31, 2022		Life
Customer relationships	$	22,600	$	801	$	21,799	10 years
Developed technology	$	4,000	$	288	$	3,712	5 years
Trade name	$	700	$	168	$	532	18 months

The above intangible assets are amortized using the straight-line method. Amortization expense related to this acquisition for the year ended December 31, 2022 was $1.3 million. The intangible assets have a weighted average useful life of approximately 8.86 years. Amortization expense related to TAGG for the next five years is as follows (in thousands):


	Total
2023	$	3,527
2024		3,125
2025		3,060
2026		3,060
2027		2,772

From the date of the acquisition through December 31, 2022, TAGG's revenue was $64.0 million and operating income was $1.1 million.

On October 19, 2021, we acquired 100% of the equity interests of Choptank Transport, LLC (“Choptank”). Total consideration for the transaction was $127.6 million in cash and the settlement of accounts receivable due from Choptank of $0.3 million. In connection with the acquisition, we granted approximately $22 million of restricted stock to Choptank's owners and senior management team, which is subject to certain vesting conditions. The grants of restricted stock were made pursuant to award agreements and issued under our 2017 Long Term Incentive Plan.

The acquisition of Choptank enhanced our refrigerated trucking transportation solutions offering and complemented our growing fleet of refrigerated intermodal containers. Choptank has developed a proprietary technology platform that we will leverage to enhance our truck brokerage service line.

The following table summarizes the allocation of the total consideration to the assets acquired and liabilities assumed as of the date of the acquisition (in thousands):


	October 19, 2021
Cash and cash equivalents	$	5,596
Accounts receivable trade		70,989
Prepaid expenses and other current assets		419
Property and equipment		169
Right of use assets - operating leases		922
Other intangibles		60,500
Goodwill		54,980
Total assets acquired	$	193,575

Accounts payable trade	$	60,970
Accrued payroll		3,458
Accrued other		359
Lease liability - operating leases short-term		309
Lease liability - operating leases long-term		613
Total liabilities assumed	$	65,709

Total consideration	$	127,866

Cash paid, net	$	122,270

The Choptank 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 consolidated balance sheet at their estimated fair values as of October 19, 2021 with the remaining unallocated purchase price recorded as goodwill. The goodwill recognized in the Choptank acquisition was primarily attributable to potential expansion and future development of the acquired business.

We incurred approximately $1.1 million of transaction costs associated with this transaction prior to the closing date that are reflected in general and administrative expense in the accompanying Consolidated Statements of Income for the year ended December 31, 2021.

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


			Accumulated		Balance at		Estimated Useful
	Amount		Amortization		December 31, 2022		Life
Customer relationships	$	36,300	$	3,025	$	33,275	15 years
Carrier network	$	14,400	$	4,500	$	9,900	4 years
Developed technology	$	6,500	$	1,161	$	5,339	7 years
Trade name	$	3,300	$	2,750	$	550	18 months

The above intangible assets are amortized using the straight-line method. Amortization expense related to this acquisition for the years ended December 31, 2022 and 2021 was $9.1 million and $2.3 million, respectively. The intangible assets have a weighted average useful life of approximately 10.51 years. Amortization expense related to Choptank for the next five years is as follows (in thousands):


	Total
2023	$	7,499
2024		6,949
2025		6,049
2026		3,349
2027		3,349

On December 9, 2020, we acquired 100% of the equity interests of NSD. Total consideration for the transaction was $105.9 million which consisted of cash paid of $89.8 million, of which $0.1 million was paid in the second quarter of 2021 as part of the post-closing true-up, and the settlement of Hub’s accounts receivable due from NSD of $16.1 million.

The acquisition of NSD expanded our logistics service offering to include final mile logistics. NSD provides residential final mile delivery services through a non-asset business model, working with a network of nearly 200 carriers throughout the country. The financial results, since the acquisition date, of NSD are included in our logistics line of business.

The following table summarizes the allocation of the total consideration to the assets acquired and liabilities assumed as of the date of the acquisition (in thousands):


	December 9, 2020
Cash and cash equivalents	$	4,775
Accounts receivable trade		25,927
Prepaid expenses and other current assets		207
Property and equipment		1,018
Right of use assets - operating leases		1,295
Goodwill, net		38,156
Other intangibles		47,700
Other assets		14
Total assets acquired	$	119,092

Accounts payable trade	$	9,972
Accrued payroll		1,324
Accrued other		578
Lease liability - operating leases short-term		373
Lease liability - operating leases long-term		922
Total liabilities assumed	$	13,169

Total consideration	$	105,923

Cash paid, net	$	84,989

The NSD 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 consolidated balance sheet at their estimated fair values as of December 9, 2020 with the remaining unallocated purchase price recorded as goodwill. The goodwill recognized in the NSD acquisition was primarily attributable to potential expansion and future development of the acquired business.

We incurred approximately $1.0 million of transaction costs associated with this transaction prior to the closing date that are reflected in general and administrative expense in the accompanying Consolidated Statements of Income for the year ended December 31, 2020.

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


			Accumulated		Balance at		Estimated Useful
	Amount		Amortization		December 31, 2022		Life
Customer relationships	$	46,200	$	6,417	$	39,783	15 years
Trade name	$	900	$	900	$	-	18 months
Agent relationships	$	600	$	313	$	287	4 years

The above intangible assets are amortized using the straight-line method. Amortization expense related to this acquisition for the years ended December 31, 2022 and 2021 was $3.5 million and $3.7 million, respectively. The intangible assets have a weighted average useful life of approximately 12.84 years.

While TAGG's actual results are included since August 22, 2022, Choptank's actual results are included since October 19, 2021 and NSD's actual results are included since December 9, 2020, the following unaudited pro forma consolidated results of operations present the effects of TAGG as though it had been acquired as of January 1, 2021 and Choptank and NSD as though they had been acquired as of January 1, 2020 (in thousands, except for per share amounts):


			Years Ended
	December 31, 2022		December 31, 2021		December 31, 2020
Revenue	$	5,470,840	$	4,796,521	$	3,887,189
Net income	$	358,054	$	172,977	$	79,578
Earnings per share
Basic	$	10.78	$	5.17	$	2.40
Diluted	$	10.67	$	5.10	$	2.37

The unaudited pro forma consolidated results for the annual periods were prepared using the acquisition method of accounting and are based on the historical financial information of Hub, TAGG, Choptank and NSD. 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 consolidated results are not necessarily indicative of what our consolidated results of operations actually would have been had we completed the TAGG acquisition as of January 1, 2021 and the Choptank and NSD acquisitions on January 1, 2020.