UPS (CCJ Top 250, No. RXO, Inc., a subsidiary of 2, announced on Sunday that it has reached an agreement to sell Coyote Logistics for $1.025billion. Coyote Logistics, based in Chicago, is a global third-party logistics (3PL), working with 100,000 network carrier and managing 10,000 loads each day.
“As UPS positions themselves to become the premier small package provider and logistic partner in the world the decision to sell Coyote Logistics allows us to focus even more on our core business,” said UPS CEO Carol B. Tome.
Tome warned in January that UPS would make ‘bold moves’ to stabilize its business and shore up revenues after the close of 2023. A $1.025 billion selling price is a far cry compared to the $1.8 billion that UPS paid almost nine years ago to acquire Coyote Logistics.
RXO will pay Coyote $1.025 billion cash under the terms of the deal. RXO will continue serving UPS’s needs for brokered transportation under a contract which runs until January 2030. Coyote Logistics’ existing capabilities and RXO’s combined capabilities make Coyote Logistics the third largest provider of brokered transport in North America.
RXO Chief executive officer Drew Wilkerson noted that the acquisition of Coyote instantly increases the scale of the brokerage business. This will provide customers with more capacity in a wider range of power lanes.
“RXO will achieve significant synergies through the acquisition, by quickly integrating Coyote’s business into RXO, and leveraging our cutting edge technology.” He said that the addition of Coyote’s customer base would diversify RXO’s vertical mix, and increase the number customers who do more than one million dollars in business with us. This acquisition will give RXO immediate and long-term growth opportunities in revenue and earnings, and will generate significant profits for shareholders.
The transaction should be completed by the end the year.