J.B. Hunt Transport Services Inc. has agreed to acquire the freight assets of Bassett Furniture Industries Inc. for $87 million to improve its final-mile deliveries of big and bulky items.
As part of the deal, J.B. Hunt on Monday said it will be a long-term transportation partner of Basset Furniture, taking over services provided by Zenith Freight Lines LLC, a wholly-owned subsidiary of Bassett.
The companies expect the sale to close at the end of February.
John Roberts, J.B. Hunt's president and chief executive officer, said in a written statement that Zenith will enhance J.B. Hunt's furniture delivery capabilities and further expand its customer offerings.
"We look forward to establishing a long-term connection with Bassett," Roberts said.
Zenith, a less-than-truckload services provider based in Conover, N.C., is responsible for moving furniture goods from manufacturing sites to import locations around the country.
As talks progressed with J.B. Hunt, Bassett executives said they began to understand the potential of partnering with such a large transportation and logistics enterprise in terms of equipment, technology, driver recruitment, intermodal operations and warehousing density.
"The sale of Zenith opens an exciting new chapter in our quest to provide the highest level of service to our customers," Robert Spilman Jr., Bassett's chief executive officer and chairman of the board, said in a written statement.
"Disruption caused by the pandemic aside, we believe that the consolidation of traditional specialized furniture transportation is inevitable," he said.
Over the years, transportation companies have spent tons of money improving their final-mile operations as shoppers buy more everyday and specialty items online. Final mile, like the name implies, is the last segment of delivery when goods reach customers' doorsteps.
From 2017 to 2020, J.B. Hunt acquired the assets of four final-mile firms worth hundreds of millions of dollars, expanding into a segment with more than 3.5 million square feet of warehouse space and 116 locations today.
This latest transaction seems to be another small, tuck-in deal for the company, said analyst Matthew Young of Morningstar.
"I would speculate that it made sense to keep the relationship going with Bassett as a key customer of Zenith's Freight operations, thus the agreement," Young said.
Last year, Zenith generated revenue of $87 million, with longtime customer Bassett representing one-third of the business, according to a news release. Its company drivers move more than 250,000 loads per year, with access to 1 million square feet of warehouse space.
J.B. Hunt said the acquisition will be funded with its existing cash balance and be subject to customary closing conditions.
As part of the deal, Zenith founders Jack and Debbie Hawn have agreed to work with J.B. Hunt on the transition.
Shares of Bassett surged more than 33%, or $4.62, to close Monday at $18.56 on the Nasdaq stock exchange in response to the news.
Shares of J.B. Hunt rose less than 1%, or 64 cents, to close at $192.54.