UPS to acquire Coyote Logistics for USD 1.8 billion

Through the Coyote network, UPS will provide their combined customer base with an even more seamless supply chain solutions portfolio from multi-modal freight shipments to small-package delivery

UPS has entered into a definitive purchase agreement to acquire Coyote Logistics, a technology-driven, non-asset based truckload freight brokerage company for USD 1.8 billion from Warburg Pincus. Founded in 2006, Coyote reported annual revenue of USD 2.1 billion in 2014. Closing is expected within 30 days, subject to customary conditions and regulatory approvals. The transaction will be financed with available cash resources and through existing and new debt arrangements.

“The brokered full-truckload freight segment is a high growth market and we expect it will continue to outpace other transportation segments,” says David Abney, UPS Chief Executive Officer. “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.”

Coyote arranges customers’ freight shipments on available trucking capacity contracted to members of its large carrier network, numbering more than 35,000 trucking companies. It has experienced very rapid revenue growth since inception and has built extensive relationships with a broad customer base. The company enjoys strong market positions among food and beverage, and consumer goods customers, as well as paper and packaging, industrial and retail segments. Following the acquisition and integration of Access America Transport to its network last year, Coyote added industry leading strength in flatbed serviced segments such as heavy equipment and construction.

During the peak holiday shipping season, UPS often supplements its fleet with contract transportation providers to meet customer demand. Coyote has played a growing role in supporting its 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.

In addition to the core profitability of Coyote, UPS is well positioned to realize a run-rate of $100 to $150 million of annual operating synergies, from backhaul utilization, purchased transportation and cross-selling opportunities.

Coyote Logistics, headquartered in Chicago, IL, was founded in 2006 and is one of the most innovative, fast-growing third-party logistics (3PL) service providers in North America. It offers services for all consultative, executional, and transactional supply chain needs. Coyote arranges transportation for more than 6,000 loads per day for shippers of all sizes and industries, from Fortune 100 companies to small businesses.

coyote.com     ups.com

Source: oevz.com