UPS has entered into a definitive purchase agreement to acquire Coyote Logistics, a technology-driven, non-asset based truckload freight brokerage company for $1.8bn from Warburg Pincus. Founded in 2006, Coyote reported annual revenue of $2.1bn in 2014.
UPS stated that the transaction will be financed with available cash resources and through existing and new debt arrangements. The acquisition is expected to be accretive to UPS earnings in 2016.
“The brokered full-truckload freight segment is a high growth market and we expect it will continue to outpace other transportation segments,” said David Abney, UPS CEO. “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 Coyote management team is very excited to become a part of UPS and continue to grow, now with UPS’s support. We’re also very thankful for the Warburg Pincus partnership over the last several years,” said Jeff Silver, Coyote’s CEO.
Coyote arranges customers’ freight shipments on available trucking capacity contracted to members of its large carrier network, numbering more than 35,000 trucking companies. The company is particularly focused on food, beverage and consumer goods customers, as well as the paper and packaging, industrial and retail segments.
During the peak holiday shipping season, UPS has supplemented its fleet with contract transportation providers to meet customer demand. Coyote has played a growing role in supporting UPS peak operations over the past few years and the company expects to leverage Coyote’s carrier network even further for this purpose in the future.
UPS has also identified revenue growth and fleet efficiency synergy opportunities by hauling shipments arranged by Coyote using existing UPS backhaul capacity within its tractor/ trailer fleet.
Coyote uses a suite of proprietary information technologies that provides market-leading transportation management applications. The company also offers several software applications that customers and transportation providers can easily integrate.
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