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UPS to Buy Coyote Logistics for $1.8 Billion

August 03, 2015


United Parcel Service said on Friday that it would buy Coyote Logistics, a smaller transportation and logistics provider, for $1.8 billion in cash.

The nine-year-old Coyote is owned by the private equity firm Warburg Pincus.

The deal is intended to help bolster UPS’s presence in the freight brokerage business, which is expected to help the delivery company become more efficient in using its fleet of familiar brown trucks.

Coyote, which contracts with more than 35,000 trucking companies, garnered $2.1 billion in sales last year.

Coyote is no stranger to UPS, supplementing the delivery giant’s services during peak shipping times in the holiday season.

UPS said that it expected to generate $100 million to $150 million of annual operational cost cuts from the deal.

“The brokered full-truckload freight segment is a high growth market and we expect it will continue to outpace other transportation segments,” David Abney, UPS’s chief executive, said in a statement. “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.”

UPS will pay for the transaction with cash on hand and a mix of new and existing debt.

The deal is expected to be closed within 30 days.

Bank of America and UBS advised UPS. Goldman Sachs, Credit Suisse, Morgan Stanley and Wells Fargo advised Coyote.

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