Freightquote.com, a Kansas City-based freight broker with 1,000 employees, is being acquired by a large Minnesota-based company for $365 million, the companies said Monday.
The deal is with C.H. Robinson Worldwide Inc., which said it planned to continue to use the Freightquote brand and to expand its Kansas City operations. Robinson provides freight and other transportation services in North and South America, Europe, Asia and the Middle East.
Tim Barton, executive chairman and founder of Freightquote, said he had been approached by other companies for a merger over the years, including by C.H. Robinson, but a deal hadn’t made sense.
“More recently the timing seemed better for both of us,” he said.
Mergers in the freight brokerage industry have created several companies with revenues larger than $1 billion, a scale previously enjoyed only by C.H. Robinson, Barton said.
“If we could find somebody that could help us where we are not good and would appreciate us for what we are good at, it would be a perfect outcome,” Barton said. “And that’s truly what we have.”
Barton started the company in Lenexa in August 1998 and launched its website in 1999, having sold a telecommunications company he co-founded. Barton will serve as a consultant to Freightquote after it is acquired.
Freightquote’s proprietary technology allows shippers to seek and compare shipping rates and other information online. It also handles shipping for customers. The company also works with freight companies to help them find freight customers in markets where they have idle equipment.
The company moved its headquarters to a new building in Kansas City with tax assistance from Missouri in what some called part of an unproductive border war that moves area jobs across the state line.
Freightquote, one of the largest online freight brokers, expects its gross revenues this year to reach $623 million from 80,000 customers for whom it provides truckload, less-than truckload and intermodal services.
Robinson’s announcement said e-commerce would become a larger part of its business and saw the acquisition of Freightquote as providing “a talented technology team with expertise in developing a great e-commerce storefront experience.”
The announcement said Freightquote also will remain in the “state-of-the-art building” it moved into last year at 901 W. Carondelet Drive in south Kansas City.
Freightquote built its 208,000-square-foot headquarters with help from Missouri economic development incentives. State assistance estimated at $64.3 million over 23 years elicited a pledge from the company to grow to 1,225 employees by next year and 1,350 by 2015.
Barton said that he could not speak for C.H. Robinson but that the intention of the deal was to generate more growth for Freightquote by joining the larger company.
Robinson and Freightquote said the deal to buy the company was likely to close in early 2015, pending regulatory approval.
Matt Druten, chief financial officer of Freightquote, will become its president, according to the terms of the deal. Tyler Ellison, the company’s current chief executive, will not remain with the company after the sale.
Robinson employs 11,000 worldwide and reported $12.8 billion in gross revenues last year. Its stock trades publicly and declined $1.23 on Monday, closing at $72.51, before the business deal was announced.
C. H. Robinson Worldwide Inc. executives will discuss the company’s agreement to buy Kansas City-based Freightquote.com during a conference call at 7:30 a.m. Central on Tuesday. To listen, visit www.chrobinson.com or dial 800-533-9703 10 minutes ahead of the call and use the conference number 7779752.