NEW YORK - United Parcel Service, a global leader in logistics, has entered into a definitive purchase agreement to acquire Coyote Logistics, a technology-driven, non-asset based truckload freight brokerage company, for $1.8 billion from private equity firm Warburg Pincus.

The acquisition fits UPS' plans for expansion, revenue growth and fleet efficiency. Both the companies foresee synergy opportunities by hauling shipments arranged by Coyote using existing UPS backhaul capacity within its tractor/trailer fleet.

Coyote arranges customers' freight shipments on available trucking capacity contracted to members of its large carrier network, numbering more than 35,000 trucking companies. Coyote has experienced very rapid revenue growth since inception in 2006. The company reported annual revenue of $2.1 billion in 2014.

It has built extensive relationships with a broad customer base. 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.

Coyote has had a long relationship with UPS. 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 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. Subject to customary conditions and regulatory approvals, the companies expect the transaction to close within 30 days,.

UPS plans to finance the transaction 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 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."

According to the Wall Street Journal, some analysts have questioned the compatibility of Chicago-based Coyote Logistics and UPS. As a freight broker, Coyote Logistics acts as a kind of travel agent for freight and doesn't own its own trucks. UPS primarily owns its own fleet, although it has a small in-house brokerage service already.

"Through the Coyote network, UPS will provide our combined customer base with an even more seamless supply chain solutions portfolio from multi-modal freight shipments to small-package delivery," said Alan Gershenhorn, UPS executive vice president and chief commercial officer.

"We will now also have the technology to help our customers improve the utilization of their fleets as part of an extended network of carriers," Gershenhorn said. "We see opportunities for greater customer and UPS fleet asset utilization that will deepen our partnerships with customers."

"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," said Abney.

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.

Coyote possesses significant industry knowledge, intellectual property, employee talent, and has a strong company culture. For these reasons, Coyote will operate as a subsidiary of UPS, under Jeff Silver's leadership, with careful attention given to supporting the unique characteristics that have enabled its success to date.

"UPS is enthusiastic about this acquisition on many levels because there are opportunities for growth, synergistic efficiencies and transfer of best practices and systems across all of our operating segments," said Abney.

One of the biggest additions to UPS's portfolio will be Coyote Logistics's technology, which allows its customers to book and sell empty space on existing truck runs, Chief Commercial Officer Alan Gershenhorn said in an interview with The Wall Street Journal.

Annually, UPS has about seven million empty trip legs annually, and filling that space will boost revenue.