UPS acquires Coyote Logistics for $1.8 bn
22 Aug 2015
UPS has acquired Coyote Logistics, a technology-driven, non-asset based truckload freight brokerage company.
With the $1.8 billion acquisition, UPS adds large scale full-truck-load (FTL) and other transportation management services to the UPS portfolio.
The company would be expected to benefit from synergies in purchased transportation, backhaul utilisation, cross selling to customers, as also technology systems and industry best practices.
David Abney, UPS chief executive officer, said, ''Coyote is a transportation and logistics innovator which has changed traditional business models to serve their customers in new, unique and more satisfying ways.
''We will provide our combined customer base with a portfolio of seamless supply chain solutions from multi-modal freight shipments to small-package delivery. We are excited to welcome the talented Coyote team to UPS,'' he continued.''
Coyote will operate as a wholly-owned subsidiary of UPS under the leadership of CEO Jeff Silver, who would report to Alan Gershenhorn, UPS chief commercial officer.
The acquisition would allow UPS to capitalise on the fast-growing freight brokerage business.
Atlanta-based UPS looks to benefit from annual operating synergies of $100 million to $150 million.
The acquisition would be accretive to UPS earnings in 2016.
The transaction would be financed with available cash, as also existing and new debt.
Coyote, among the fastest growing third-party logistics providers in the country, coordinates the movement of freight across North America for some 40,000 shippers of all sizes.
Its clientele spans across numerous industries, including consumer goods, industrial goods, retail, and healthcare. The past year saw Coyote book $2-billion in revenue.
The industry had seen several consolidations as more and more consumers shopped online and demanded quicker delivery of purchases.
The UPS-Coyote union marked the third-largest logistics deal this year.
In April, UPS's main rival FedEx Corp announced a $4.8 billion deal for Dutch parcel delivery company TNT Express.
The same month, XPO Logistics Inc struck a deal to acquire European rival Norbert Dentressangle SA for about $3.53 billion, including debt.
