Atlanta — United Parcel Service said Sunday it has agreed to sell its Coyote Logistics unit to RXO for just over $1 billion, less than the price it paid for the freight brokerage in 2015, as it seeks to focus more on its core business of parcel delivery.
UPS said it expects the sale to close by the end of the year if regulators give the go-ahead. Atlanta-based UPS said it would update its financial outlook once the sale is complete.
“Our decision to sell our Coyote Logistics business will allow us to better focus on our core competencies,” UPS CEO Carol Tom said in a statement.
A freight broker acts as an intermediary between shippers and carriers such as UPS.
Charlotte, North Carolina-based freight broker RXO said the Coyote acquisition would nearly double its annual sales to $7.1 billion, making it the third-largest freight broker in North America. Coyote has 15,000 clients and 2,500 employees, the company said.
UPS acquired Coyote from private equity firm Warburg Pincus for $1.8 billion to expand its fast-growing cargo-brokerage business, after it had previously used the company to secure extra truck space for shipments during the peak holiday season.
When UPS acquired Coyote, it had a network of more than 35,000 carriers. UPS said Sunday that the Chicago-based company now works with 100,000 carriers and manages 10,000 packages a day.
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