UPS completes closing of acquisition of Coyote Logistics
UPS said this week it has officially completed the closing of its $1.8 billion acquisition of Coyote Logistics. The deal was made official on July 31.
As previously reported, This deal is significant in myriad ways, most notably in how it equips UPS as a major player in an increasingly crowded truckload brokerage space by acquiring Coyote, a company clearly on the rise with an excellent reputation throughout the industries it serves. Coyote, as noted in a Bloomberg report, is backed by New York-¬based private equity firm Warburg Pincus, which first invested in the company in 2007.
Coyote Logistics was established in 2006 and reported annual revenue of $2.1 billion in 2014. Its CEO Jeff Silver will remain on board in his current role, with Coyote operating as a subsidiary of UPS. Coyote significantly increased its scale and reach, when it reached a merger agreement in March 2014 with Access America Transport, with Access America operating under the Coyote brand. While financial terms of the deal were not disclosed, the combined entity was expected to have a run rate revenue of more than $2 billion, 17 locations in North America, roughly 40,000 contracted carriers, and about 1,750 employees. And when Coyote brought Access America into the fold, it added major capabilities for flatbed serviced segments like heavy equipment and construction.
Industry stakeholders maintain this deal has the potential to surprise the market in that it represents the meshing of two different company cultures, with UPS being a highly process-oriented potentially bringing Coyote, a fast-growing company that is becoming a bigger player in the truckload brokerage space and on a fast track that is also known for its relaxed millennial culture.
“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 David Abney, UPS chief executive officer, in a statement. “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.”
UPS said Coyote will operate as a wholly owned subsidiary of UPS under CEO Jeff Silver, with Silver reporting to Alan Gershenhorn, UPS chief commercial officer.
UPS added that bringing Coyote into the fold brings large scale full-truck-load (FTL) and other transportation management services to its service portfolio, adding that it expects to benefit from synergies in purchased transportation, backhaul utilization, cross-selling to customers, as well as technology systems and industry best practices.