Transportation and shipping services provider, United Parcel Service Inc. (NYSE: UPS), agreed to acquire Coyote Logistics LLC for $1.8 billion to expand its transit and courier business.
UPS has become one of the largest package delivery companies and a leading global provider of specialized transportation and logistics services managing the flow of goods, funds, and information in more than 200 countries and territories worldwide. According to the carrier company, Coyote Logistics connects customers with truck operators and has a network of more than 35,000 operators in North America, reporting a revenue of $2.1 billion in the last year.
The Atlanta-based company expects the transaction to create $100 million to $150 million in annual operating savings and add to earnings in the next year.
The settlement will provide additional efficient services to UPS’s portfolio in the freight brokerage business. Coyote has played a consistent role in the company’s peak operations over the past few years. Their technology allows consumers to sell or acquire the empty space on existing truck runs. UPS has about seven million empty leg trips annually; utilizing that space will raise revenue. The company as a whole will be able to maintain its profitability as it reduces costs after the peak holiday shipping season, striving for cheaper and better delivery methods.
"The brokered full-truckload freight segment is a high growth market and we expect it will continue to outpace other transportation segments," said UPS Chief Executive Officer David Abney. "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 deal is expected to close within 30 days.