The merger is set to increase FreightHub’s growth by 100% with 2020 annual revenue to be in excess of $9 million.
Shares of Hudson Capital Inc. (HUSN) are trading with a strong momentum today after the company announced that it is set to acquire FreightHub, Inc. (Fr8Hub), a North American based transportation logistics firm focused on U.S.-Mexico cross-border shipping.
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Hudson Capital stock started the day with quite a positive uplift surging up to 11% as it kicked off at $0.86. Currently, at 1:47 P.M. EDT, HUSN was trading at 0.69 up by 7%. The trading volume was 23,656,671 with a market capitalization of almost $22 million.
As per the merger agreement, the existing shareholders of Fr8Hub are planning to invest $12 million in connection with the closing of the transaction deal with Hudson Capital. The closing of the transaction is expected in Q1 of 2021.
Fr8Hub provides simplifying domestic and international cross-border shipping services via its cloud-based transportation logistics platform. The innovative digital freight matching technology helps the shippers to connect a broad network of drivers and carriers in the U.S., Canada, and Mexico borders.
The digital freight marketplace, public application programming interface (API), transportation management systems (TMS), and customer support tools are designed by Fr8Hub for maximizing the efficiency from scheduling to delivery for shippers and carriers. The basic goal of the company is to make shipping simple, efficient, and transparent.
The CFO of Hudson Capital, Hon Man Yun
“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.”
Fr8Hub began selling its Fr8Hub 2.0 in earnest in June after it completed a three year of innovative software development on its platform. Since June, the company has recorded extraordinary month-over-month revenue growth.
The monthly revenue has grown from $247K in May 2020 to over $1 million in September 2020, which is a quite massive increase. With the merger deal with Hudson Capital, the company expects its full year 2020 revenue to be around $9 million.
The merger agreement also includes a revenue earnout schedule. The following table reflects guided revenue targets for the next years:
| Revenue Year | USD, Millions | YOY Growth Rate (%) | ||
| 2019 Actual | $ | 4.2 | – | |
| 2020 Guidance | $ | 9 | 114 | % |
| 2021 Earnout Target1,2 | $ | 25 | 178 | % |
| 2022 Earnout Target1,2 | $ | 50 | 100 | % |
| 2023 Earnout Target1,2 | $ | 100 | 100 | % |
Both the companies are yet to approve this merger deal from its shareholders and the completion of the merger deal requires shareholder’s approval. Once the required approvals are obtained, this deal will result in Fr8Hub becoming a wholly-owned subsidiary of Hudson Capital.
