UPS sells its Coyote Logistics business to RXO for $1 billion
By Mike Murphy
United Parcel Service Inc. said Sunday it has agreed to sell its freight-brokerage business, Coyote Logistics, to RXO Inc. for $1.025 billion in cash.
The deal will make RXO (RXO) North America's third-largest provider of brokered transportation, the Charlotte, N.C.-based company said in a statement.
UPS (UPS) Chief Executive Carol B. Tomé said the sale would allow "an even greater focus on our core business."
RXO said the deal would be funded by a mix of equity and debt, including investments of $300 million from MFN Partners and $250 million from Orbis Investments, two of the company's largest stakeholders.
RXO said the acquisition will result in "annualized cost synergies" of at least $25 million, and expects the deal to close by the end of 2024.
UPS bought Chicago-based Coyote in 2015 for $1.8 billion. Last year, Coyote took in about $3.2 billion in revenue, with about $470 million in gross margin and roughly $86 million of adjusted EBITDA, according to RXO.
Shares of Atlanta-based UPS have fallen about 13% year to date, compared to the S&P 500's SPX 15% gain this year. RXO shares are also down about 13% in 2024.
-Mike Murphy
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06-23-24 1630ET
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