RXO Acquires Coyote Logistics from UPS for $1 Billion

RXO Inc. acquired United Parcel Service Inc.’s asset-light freight brokerage business, Coyote Logistics, for more than $1 billion. UPS purchased Coyote for $1.8 billion in 2015. The deal makes RXO the third-largest provider of brokered transportation in North America.

Chicago-based Coyote Logistics manages around 10,000 loads per day with a network of over 10,000 carriers.

“As UPS positions itself to become the premium small package provider and logistics partner in the world, the decision to sell our Coyote Logistics business allows an even greater focus on our core business,” said Carol B. Tomé, the chief executive officer at UPS, in the release.

“RXO will realize significant synergies from the acquisition by quickly integrating Coyote’s business into RXO and leveraging our cutting-edge technology,” said Drew Wilkerson, chief executive officer of RXO. “The addition of Coyote’s customer base will diversify RXO’s vertical mix and will increase the number of customers that do more than $1 million in business with us by approximately 80%.

The acquisition was well received Wall Street, with RXO’s stock price hitting a 52-week high on June 23, reaching $25.07, according to Barchart.

In a conference call with analysts, Wilkerson said the sales agreement with UPS contains a provision that will have UPS continue to use RXO’s services through 2030, though the size of the commitment was not revealed.

Wilkerson noted it had made a dozen acquisitions since 2012, including those when it was part of XPO (NYSE: XPO) before it was spun off in 2022. “Our differentiated approach has enabled us to organically grow brokerage volumes by nearly 70% over the last five years, significantly outperforming the industry,” he said.