The company said Wednesday morning that it had agreed to acquire New Jersey-based Cory 1st Choice Home Delivery for $100 million. The acquisition will be funded by Hunt's revolving credit facility.
“This is a strategic investment that will further advance our final mile delivery capabilities of ‘big and bulky’ products to consumers and expand our expertise in furniture delivery,” John Roberts, president and CEO of J.B. Hunt, said in the company's prepared statement.
(A follow-up story on the Hunt acquisition can be found here.)
The final mile in this case is not the packages and parcels delivered by UPS (NYSE: UPS) and FedEx (NYSE: FDX). It's the "big and bulky" part of the business that is viewed as a growing business opportunity as ecommerce moves into larger products with the need to meet customer demand for quick delivery. XPO Logistics (NYSE: XPO), in particular, has touted its capabilities in this area.
Cory is an old-line firm, having been founded in New Jersey in 1934. It has 14 warehouses and "utilizes more than 1,000 independent contractors, carriers and delivery drivers to complete over 2 million annual deliveries," the Hunt statement said.
Cory will go into the Final Mile division Dedicated Services business unit of J.B. Hunt. Two years ago, Hunt acquired Special Logistics Dedicated that expanded the type of services Cory provides. With the Cory acquisition, Hunt said, "Final Mile will grow to include 100 locations and over 3.1 million square feet of warehouse and facilities space."
"Large-product last-mile delivery is unlike any other home delivery service," the Cory website says about the business it is in. "The logistics demand increased customer communications. A positive experience must be delivered at every customer touchpoint: from coordinating product delivery to the product arrival experience at the customer’s home."
As an observer once noted, last mile for big and bulky products puts a company's employees right into a person's home to set up anything from large appliances to treadmills. That makes it a very different business than delivering parcels.