RXO Completes Acquisition of Coyote Logistics with previous announcements of additional financing to complete the deal. On September 9, RXO (NYSE: RXO) announced an additional round of financing with the upsizing and pricing of its public offering of common stock. This helped by increasing the total gross proceeds an additional $500 million. The company priced 19,230,770 shares at $26.00 per share, subject to customary conditions. RXO had also granted the underwriters an option to purchase an additional 2,884,615 shares at the same price.
Today, RXO has completed its acquisition of Coyote Logistics from UPS for $1.025 billion. This in effect solidifies its position as the third-largest provider of brokered transportation services in North America. The acquisition strengthens RXO’s market presence, diversifies its customer base, and expands its carrier network. The proceeds from the latest offering was used to finance a portion of RXO’s acquisition of Coyote Logistics from UPS. UPS had acquired it in 2015 as UPS’s technology-driven, asset-light freight brokerage business.
Impacts of the RXO Acquisition of Coyote Logistics
For RXO’s customers, the RXO completes acquisition of Coyote Logistics offers increased network density and additional power lanes. Carriers who operate for RXO will benefit from access to a broader range of customers and opportunities to reduce deadhead miles, which are trips made without cargo.
From today’s press release (Business Wire), Drew Wilkerson, CEO of RXO, expressed enthusiasm about the acquisition, stating, “We’re thrilled to welcome Coyote’s employees, customers, and carriers to RXO. This acquisition enables us to provide customers with even more capacity. Our larger scale will provide carriers with access to more freight.” Wilkerson also emphasized that the company remains committed to integrating Coyote’s people and technology to further innovate and enhance its service offerings.
Financial Institutions Involvement
The offering and financing to complete RXO’s acquisition of UPS’s Coyote Logistics included Goldman Sachs, Bank of America Securities, Citigroup, and Morgan Stanley. They, along with several other financial institutions acting as joint book-running managers and co-managers, were leading the offering. This also puts RXO on the Go Trucking Magazine’s Golden 22 stock watch list. Congratulations RXO and Coyote!