UPS Slims Down: Sells Logistics Unit Coyote to RXO for $1 Billion

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United Parcel Service (UPS), the world’s largest package delivery company, has announced the sale of its Coyote Logistics business unit to RXO for $1.025 billion. The deal, set to be funded through a combination of equity and debt, will include a $300 million equity investment from MFN Partners and a $250 million equity investment from Orbis Investments, according to a statement from North Carolina-based RXO.

“The decision to sell our Coyote Logistics business allows an even greater focus on our core business,” said UPS Chief Executive Officer Carol Tome. This strategic move is expected to help UPS streamline its operations and concentrate more on its primary package delivery services.

RXO specializes in assisting shippers and carriers in moving freight efficiently. The acquisition of Coyote Logistics is anticipated to enhance RXO’s capabilities and market reach in the logistics sector.

UPS originally purchased Coyote Logistics from private equity firm Warburg Pincus for $1.8 billion in 2015, aiming to expand its full-truckload services. The sale marks a significant shift in UPS’s strategy, allowing the company to reallocate resources and efforts towards strengthening its core delivery services amidst a competitive logistics landscape.