Franchise News

UPS to Acquire Coyote Logistics, Expanding its Portfolio

Jul 31, 2015 10:14 PM EDT | By Jean-Claude Arnobit

United Parcel Service, Inc. (UPS) is set to acquire Coyote Logistics, a technology-driven and non-asset based truckload freight brokerage, from Warburg Pincus for $1.8 billion, according to a press release issued by UPS.

The acquisition will expand UPS's portfolio, allowing it to add a large-scale, non-asset based, full-truckload and transportation management services.

David Abney, CEO of UPS, said in the press release that the acquisition positions UPS to benefit from an "exciting new revenue growth and synergy opportunities."

"The brokered full-truckload freight segment is a high growth market and we expect it will continue to outpace other transportation segments," he said.

The acquisition will also benefit UPS during the peak holiday shipping season.

Coyote's large carrier network, which is more than 35,000 trucking companies, and expertise in arranging customers' freight shipments on available trucking capacity, will allow UPS to meet its customers demand during the holiday season, according to the press release.

"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," Alan Gershenhorn, executive vice president and chief commercial officer of UPS, said in the press release.

Bloomberg adds that Nate Brochmann, an analyst from William Blair & Co., said that the acquisition gives UPS access to an area where it is lacking.

He also added that this follows a pattern of transportation companies offering many types of services.

The deal would already be the third this year as logistics companies try to keep up with the rising demand from consumers.

Bloomberg reports that in April, FedEx Corp. agreed to buy Dutch delivery company TNT Express NV for $4.8 billion. Days later, XPO Logistics Inc. agreed to acquire France's Norbert Dentressangle SA in a deal valued at $3.53 billion including debt.

UPS expects the deal to close within 30 days, subject to customary conditions and regulatory approvals. The deal is also expected to be accretive to UPS earnings in 2016, according to the press release.

© 2024 Franchise Herald. All rights reserved.

Franchise News

Real Time Analytics