ACQUISITION

3 Months Ended

Mar. 31, 2022

ACQUISITION.

ACQUISITION

NOTE C – ACQUISITION

On November 1, 2021 (the “acquisition date”), the Company acquired MoLo Solutions, LLC (“MoLo”), a Chicago-based truckload freight brokerage company, pursuant to the Agreement and Plan of Merger (the “Merger Agreement”), dated September 29, 2021. Terms of the transaction included initial consideration paid at closing of $239.4 million, including and subject to certain post-closing adjustments which were estimated at closing and will be finalized post-closing. The Company funded the initial purchase price with cash on hand. The Merger Agreement provides for certain additional cash consideration to be paid by the Company based on the achievement of certain targets of adjusted earnings before interest, taxes, depreciation and amortization for each of the years ended December 31, 2023, 2024, and 2025. At 100% of the target, the cumulative additional consideration for years 2023 through 2025 would be $215.0 million, with the possible undiscounted cash consideration due ranging from a total of $95.0 million at 80% of target to $455.0 million at 300% of target, as outlined in the Merger Agreement.

The following table represents the components of the total purchase consideration for the acquisition of MoLo. The Company recorded the estimated fair value of contingent consideration at the acquisition date as a part of the purchase price consideration for the acquisition. The purchase consideration is preliminary and is dependent on final post-closing adjustments and completion of a net working capital audit.

	Purchase
	Consideration
	(in thousands)
Net cash consideration, including estimated post-closing adjustments	$	239,398
Contingent consideration		93,700
Total purchase consideration	$	333,098

The results of MoLo’s operations subsequent to the acquisition date have been included in the accompanying consolidated financial statements, with the acquired operations included within the ArcBest operating segment (see Note K). The acquisition of MoLo enhances the scale of the Company’s truckload brokerage services by providing additional truckload capacity, support, and expertise in the Company’s Asset-Light operations and increasing cross-selling potential.

The following table summarizes the estimated fair values of the acquired assets and liabilities assumed at the acquisition date, including measurement period adjustments related to working capital. The Company is in the process of making a final determination of acquired assets and liabilities, with remaining matters primarily related to finalization of a net working capital audit, and thus, the provisional measurements are subject to change.

	Purchase
	Allocation
	(in thousands)
Accounts receivable	$	134,702
Prepaid expenses		468
Property and equipment		2,309
Operating lease right-of-use assets		844
Intangible assets		76,900
Other assets		170
Total identifiable assets acquired		215,393
Accounts payable		91,228
Accrued expenses and other current liabilities		2,724
Operating lease liabilities		983
Total liabilities		94,935
Total identifiable net assets		120,458
Goodwill		212,640
Net assets acquired	$	333,098

The MoLo acquisition has been accounted for as a business combination using the acquisition method of accounting. The total purchase consideration to acquire MoLo has been allocated to the assets acquired and liabilities assumed as of November 1, 2021, with the excess purchase price recorded as goodwill. See Note D for further discussion of acquired goodwill and intangible assets.