UPS Agrees to Acquire Coyote for $1.8 Billion
UPS Inc. announced it has agreed to buy truckload brokerage Coyote Logistics for $1.8 billion to expand its presence in the non-asset-based sector.
The package carrier, which already has a small truckload brokerage as well as international brokerage and forwarding businesses, said in a statement that closing is expected within 30 days. Private equity company Warburg Pincus is selling the business that had $2.1 billion in sales last year and ranks No. 39 on the Transport Topics Logistics 50.
UPS anticipates paying for the Chicago-based company with cash and debt and expects that the deal will add to earnings next year. Coyote reported net revenue of $255 million in the latest edition of the Logistics 50.
“The brokered full-truckload freight segment is a high-growth market, and we expect it will continue to outpace other transportation segments,” UPS CEO David Abney said. “This high-quality acquisition significantly increases UPS full-truckload scale, and we are uniquely positioned to take advantage of exciting new revenue growth and synergy opportunities.”
The move represents the latest consolidation step in the logistics sector, following acquisitions by FedEx, XPO Logistics, Echo Global Logistics and others this year.
“The Coyote management team is very excited to become a part of UPS and continue to grow, now with UPS’ support,” Coyote CEO Jeff Silver said.
UPS, which ranks No. 1 on the Transport Topics list of the top 100 for-hire carriers in the United States and Canada, established a brokerage unit within existing truckload services at UPS Freight. Though statistics for the brokerage activity aren’t disclosed, the truckload unit in the second quarter totaled sales of $63 million.
Synergies from the acquisition, such as better backhaul utilization, were estimated at $100 million to $150 million.
Coyote serves the consumer goods, industrial and other sectors with a corps of 35,000 carriers. Silver will remain at the helm of Coyote, which will be operated as a separate unit of UPS.
