News #68 - RXO kết quả dữ liệu bongdaso acquire UPS’ Coyote Logistics

The parcel giant expects kết quả dữ liệu bongdaso complete the .025 billion deal by the end of 2024.

RXO entered a definitive agreement kết quả dữ liệu bongdaso buy Coyote Logistics from UPS for .025 billion, according kết quả dữ liệu bongdaso a news release Sunday.

RXO expects the deal kết quả dữ liệu bongdaso help diversify and expand its customer base, providing at least million in synergies, according kết quả dữ liệu bongdaso the company.

The deal could be complete by the end of the year, but Coyote will continue its ties with UPS through a contract with RXO that runs through January 2030.

The deal will diversify RXO and help reduce deadhead miles, CEO Drew Wilkerson said on a Monday conference call.

That’s because there’s minimal overlap between the two businesses’ largest customers: Coyote’s top two verticals are food and beverage and transportation, while RXO’s top clients are in retail, industrial and manufacturing, he said.

“This is a transformational deal for RXO,” Wilkerson said, adding the acquisition will make the business the third-largest freight brokerage in North America.

For UPS, selling the subsidiary allows the parcel giant kết quả dữ liệu bongdaso focus on its core business, CEO Carol Tomé said in a news release. That echoed commentary she gave in January during a Q4 earnings call that alluded kết quả dữ liệu bongdaso UPS’ interest in potentially offloading the business, following an million impairment charge related kết quả dữ liệu bongdaso Coyote.

In 2021, UPS similarly broke off its LTL business unit when it sold its UPS Freight division kết quả dữ liệu bongdaso TFI International.

UPS acquired Coyote in 2015 for .8 billion, but executives noted in January how the highly cyclical business and excess capacity in the market created ongoing issues.

Synergies represent about 30% of Coyote’s 2023 earnings before interest, taxes, depreciation, and amortization (EBITDA), a sizable amount, according kết quả dữ liệu bongdaso Jamie Harris, RXO’s CFO. He also noted that RXO has a strong, continuous improvement mindset, looking at ways kết quả dữ liệu bongdaso reduce costs in its own company. He suggested that approach will continue kết quả dữ liệu bongdaso play out across the board following the acquisition.

“This is an opportunity,” Harris said. “We’re going kết quả dữ liệu bongdaso see processes from both companies. We’ll be able kết quả dữ liệu bongdaso take the best of both worlds.”

kết quả dữ liệu bongdaso complete the deal, equity investments will come from RXO shareholders MFN Partners and Orbis Investments, totaling 0 million. Debt will also contribute

As part of the deal, RXO will also acquire “certain assets used kết quả dữ liệu bongdaso conduct haulage, dedicated transport and warehousing services in the United Kingdom,” according kết quả dữ liệu bongdaso a securities filing.

Once the transaction closes, Coyote employees will become part of RXO, and no decision has been made about any further changes, a company spokesperson also said in an email kết quả dữ liệu bongdaso Trucking Dive.

“The addition of Coyote will significantly increase our scale,” Wilkerson said, noting it will also provide further opportunities. “Our larger scale will allow us kết quả dữ liệu bongdaso purchase transportation even better than we currently do.”

In a similar move, digital freight platform Transfix recently sold its brokerage kết quả dữ liệu bongdaso NFI and pivoted, landing the 3PL as its first third-party customer for its transportation management software.

RXO’s Wilkerson said they expect the industry will further consolidate in the next four or five years.

“Customers are going kết quả dữ liệu bongdaso want kết quả dữ liệu bongdaso do business with large brokerages that are financially stable, that have built good relationships, that have a strong carrier base, they’re going kết quả dữ liệu bongdaso be the winners in this,” he said. “And we think that today’s move only positions us even better kết quả dữ liệu bongdaso continue kết quả dữ liệu bongdaso go out there and take market share in this market.”

Source: https://www.truckingdive.com/news/rxo-kết quả dữ liệu bongdaso-acquire-ups-coyote-logistics-for-over-one-billion/719582/

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