RXO, a Charlotte, NC-based provider of asset-light transportation solutions, acquired Coyote Logistics, an asset-light freight brokerage business, for $1.025 billion, from UPS.
This acquisition will enhance RXO’s market position, diversify and expand its customer base, and broaden its carrier network.
Founded in 2006, Coyote Logistics is a global third-party logistics provider that leverages its network of 100,000 carriers to ship goods for 15,000 customers. Coyote, which became a UPS company in 2015, generated approximately $3.2 billion in revenue in 2023 with approximately $470m in gross margin and approximately $86m of adjusted EBITDA.
Led by Drew Wilkerson, chief executive officer, RXO (NYSE: RXO) is a provider of asset-light transportation solutions that offers tech-enabled truck brokerage services together with complementary solutions including managed transportation, freight forwarding and last mile delivery.
The strategic transaction is immediately and significantly accretive to RXO’s adjusted diluted earnings per share and adjusted free cash flow. It also expands the company’s market position with increased capacity for customers and increased access to freight for carriers. RXO will fund the transaction with mix of equity and debt that is expected to be neutral to leverage.
