UPS has completed the $1.8 billion acquisition of US truckload freight brokerage company Coyote Logistics following the announcement of the purchase last month.
'Coyote is a transportation and logistics innovator which has changed traditional business models to serve their customers in new, unique and more satisfying ways,' said UPS CEO, David Abney, in commenting on the deal.
'We will provide our combined customer base with a portfolio of seamless supply chain solutions from multi-modal freight shipments to small-package delivery. We are excited to welcome the talented Coyote team to UPS.'
With revenues of $2.1 billion in 2014, Chicago-based Coyote Logistics adds large scale full-truck-load (FTL) and other transportation management services to the UPS portfolio.
UPS expects to benefit from synergies in purchased transport, backhaul utilization, cross-selling to customers, as well as technology systems and industry best practice, it said.
It will become a UPS subsidiary under its existing management, with Coyote’s CEO Jeff Silver reporting to Alan Gershenhorn, UPS chief commercial officer.
Coyote arranges customers’ freight shipments on available trucking capacity contracted to members of its large carrier network, numbering more than 35,000 trucking companies.
Since its 2006 launch, Coyote has experienced very rapid revenue growth and 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 industry leading strength in flatbed serviced segments such as heavy equipment and construction.
Coyote uses a suite of proprietary information technologies that provides market-leading transportation management applications. The company also offers several software applications that customers and transportation providers can easily integrate.
During the peak holiday shipping season, UPS often supplements its fleet with contract transport providers to meet customer demand. It said Coyote had 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”.
UPS has also identified revenue growth and fleet efficiency synergy opportunities by hauling shipments arranged by Coyote using existing UPS backhaul capacity within its tractor/trailer fleet.
The transaction has been financed with available cash resources and through existing and new debt arrangements, and the acquisition is expected to be accretive to UPS earnings in 2016.
