UPS has announced that it has entered into a definitive purchase agreement to acquire Coyote Logistics, a technology-driven, non-asset based truckload freight brokerage company for US$1.8 billion from its current owner Warburg Pincus. The US express and logistics giant said it expected to close the deal within 30 days to acquire Coyote, which was founded in 2006 and reported annual revenue of $2.1 billion in 2014.
David Abney, UPS CEO said: “The brokered full-truckload freight segment is a high growth market and we expect it will continue to outpace other transportation segments. 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.”
Jeff Silver, Coyote CEO, said: “The Coyote management team is very excited to become a part of UPS and continue to grow, now with UPS’s support. Our great people, leading technology and flexible organization will enable us to scale quickly to take full advantage of the added customers, lanes and capacity within UPS.”
Coyote arranges customers’ freight shipments on available trucking capacity contracted to members of its large carrier network, numbering more than 35,000 trucking companies. UPS said it had experienced very rapid revenue growth since inception and has built extensive relationships with a broad customer base.
UPS said it had 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.
“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 utilisation of their fleets as part of an extended network of carriers.”
Abney concluded: “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.”
