Does anyone know what ECHO paid for Open Mile? I don't own shares of ECHO yet (I own some XPO) and I wanted to see if anyone knew how big Open Mile was and how profitable and what the deal cost ECHO. Thanks for helping if you know.
If history is any indicator, Echo will stiff the owners of Open Mile and force them to sue for their money. Check out how Lefkofsky intimidated the owners of Shipper Direct. The May Report covered the story.
Maybe Shipper Direct shouldn't have lied about their historic revenue when negotiating with ECHO.
Effective July 1, 2012, the Company acquired the assets of Shipper Direct Logistics, Inc. (“Shipper Direct”), a truckload transportation brokerage located near Nashville, Tennessee. In August 2012, the Company discovered that the revenue and profitability of the acquired business, both prior and subsequent to the acquisition, were not as expected based on the representations contained in the Asset Purchase Agreement. The Company believes the representations made in the Asset Purchase agreement were fraudulent. The founders of Shipper Direct, who had become employees of the Company, were terminated as a result, and the Company requested that the sellers return the entire purchase price and that the contingent consideration provision of the Asset Purchase Agreement be voided. However, the Company only received $1,779,554. On September 25, 2012, the sellers asserted indemnification claims against the Company under the indemnification provisions of the Asset Purchase Agreement for $2,400,000, including a claim for the repayment of the $1,779,554 return of purchase price. The Company believes the sellers' indemnification claims are without merit and intends to vigorously defend against any legal action taken by the sellers with respect to their indemnification claims.