UPS to Acquire Coyote Logistics for $1.8 billion
UPS has entered into a definitive purchase agreement to acquire Coyote Logistics, a non-asset based truckload freight brokerage company for $1.8 billion from Warburg Pincus, a private equity firm.
Founded in 2006, Coyote reported annual revenue of $2.1 billion in 2014. Closing is expected within 30 days. The deal had been rumored for some time.
“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, CEO of UPS. “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,” added said Jeff Silver, Coyote’s CEO. “Our 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. Coyote 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 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 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.
“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. We see opportunities for greater customer and UPS fleet asset utilization that will deepen our partnerships with customers.”
Coyote uses a suite of proprietary information technologies that provides transportation management applications. The company also offers several software applications that customers and transportation providers can easily integrate.
Coyote will operate as a subsidiary of UPS, under the leadership of Jeff Silver, its current CEO.
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