Chicago just scored its next billion-dollar acquisition. United Parcel Sercel Service Inc. announced today it will buy Coyote Logistics for $1.8 billion.
The announcement comes after last week’s inside reports that the two companies were in talks.
Backed by New York-based private equity firm Warburg Pincus, the Chicago company had a reported revenue of around $2 billion last year. Founded in 2006, Coyote manages freight movement for industries from consumer and industrial goods to retail and health care.
"The brokered full-truckload freight segment is a high growth market and we expect it will continue to outpace other transportation segments," said David Abney, UPS Chief Executive Officer, 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."
Closing is expected within 30 days. Projected to be accretive to UPS’s 2016 earnings, the company will finance the transaction with on-hand cash resources and existing and new debt arrangements.
"The Coyote management team is very excited to become a part of UPS and continue to grow, now with UPS's support. We're also very thankful for the Warburg Pincus partnership over the last several years," said Jeff Silver, Coyote CEO in the statement.
Silver will stay on board to lead the logistics company as a UPS subsidiary.
This transaction follows a trend of larger logistics deals this year. In April, FedEx Corp bought out Dutch delivery service TNT Express for $4.8 billion, and the fellow billion-dollar acquisition of Norbert Dentressangle SA by XPO Logistics Inc. followed shortly thereafter.
Coyote currently operates at 17 different locations and employees about 1,750 employees. Those employees (as well as their systems and culture) will be supported by UPS.
Have a tip for us or know of a company that deserves coverage? Email us via [email protected].