United Parcel Service (UPS) has announced its decision to sell its Coyote Logistics division to RXO for just over $1 billion. This move comes as UPS aims to refocus on its core package-delivery business. The sale, expected to be finalized by the end of the year pending regulatory approval, will prompt UPS to update its financial outlook post-completion.
UPS CEO Carol Tome emphasized that divesting Coyote Logistics will enable the company to concentrate more on its primary operations. Coyote Logistics, a freight-brokerage company, acts as an intermediary between shippers and carriers like UPS.
RXO, a freight broker based in Charlotte, North Carolina, anticipates that acquiring Coyote will significantly expand its operations, boosting its annual revenue to $7.1 billion and positioning it as the third-largest freight broker in North America. Coyote Logistics currently boasts 15,000 customers and employs 2,500 individuals.
Notably, UPS had initially purchased Coyote Logistics from private-equity firm Warburg Pincus for $1.8 billion in 2015, seeking to capitalize on the thriving freight-brokerage industry. Prior to the acquisition, UPS had utilized Coyote's services to secure additional truck capacity for holiday-season shipments.
At the time of the purchase, Coyote had a network of over 35,000 trucking companies. Presently, the Chicago-based company collaborates with 100,000 carriers and manages 10,000 loads daily, underscoring its substantial growth under UPS ownership.
