Shipping giant UPS announced the sale of freight brokerage company Coyote Logistics for more than $1 billion.
On June 23, UPS announced the sale of Chicago-based Coyote Logistics to RXO, Inc. for $1.025 billion.
RXO reports that it will be the third-largest provider of brokered transportation in North America following the completion of the acquisition.
The companies say that RXO will continue to serve UPS’s brokered transportation needs under a contract that runs through January 2030.
The transaction is subject to regulatory review and approval. The deal is expected to close by the end of 2024.
Coyote Logistics currently works with 100,000 network carriers to manage 10,000 loads per day.
“As UPS positions itself to become the premium small package provider and logistics partner in the world, the decision to sell our Coyote Logistics business allows an even greater focus on our core business,” said UPS Chief Executive Officer Carol B. Tomé.
“RXO’s highly accretive acquisition of Coyote will immediately increase the scale of our brokerage business, providing customers with more capacity across a wider array of power lanes,” said Drew Wilkerson, chief executive officer of RXO. “RXO will realize significant synergies from the acquisition by quickly integrating Coyote’s business into RXO and leveraging our cutting-edge technology. The addition of Coyote’s customer base will diversify RXO’s vertical mix and will increase the number of customers that do more than $1 million in business with us by approximately 80%. This acquisition will provide RXO with both immediate and long-term opportunities for revenue and earnings growth and will generate significant returns for shareholders. I look forward to welcoming Coyote’s employees to our team and working together to achieve excellent results for our customers, shareholders, carrier partners and employees for years to come.”
In January 2024, UPS leadership suggested that Coyote Logistics could be put up for sale as the company reported a sharp decline in revenue.
UPS acquired Coyote Logistics in the summer of 2015 for $1.8 billion.