RXO To Buy Coyote Logistics From UPS In Billion-Dollar Deal - What's On The Move?
Portfolio Pulse from Lekha Gupta
RXO, Inc. (NYSE:RXO) has agreed to acquire Coyote Logistics from United Parcel Service, Inc. (NYSE:UPS) for $1.025 billion in cash. The deal, financed through equity and debt, is expected to close by the end of 2024 and will make RXO the third-largest provider of brokered transportation services in North America. The acquisition is anticipated to significantly enhance RXO's adjusted EPS and free cash flow, with expected annualized cost synergies of at least $25 million. RXO shares are up 13.8% premarket following the announcement.
June 24, 2024 | 11:34 am
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NEUTRAL IMPACT
United Parcel Service, Inc. (NYSE:UPS) is selling Coyote Logistics to RXO for $1.025 billion. This move allows UPS to focus more on its core business of being a premium small package provider and logistics partner.
The sale of Coyote Logistics allows UPS to concentrate on its core business. While this is a strategic move, the immediate financial impact on UPS is neutral.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
RXO, Inc. (NYSE:RXO) is acquiring Coyote Logistics from UPS for $1.025 billion, a move expected to significantly enhance RXO's market position, adjusted EPS, and free cash flow. The deal is set to close by the end of 2024.
The acquisition will make RXO the third-largest provider of brokered transportation services in North America, significantly enhancing its market position and financial metrics. The market has reacted positively, with RXO shares up 13.8% premarket.
CONFIDENCE 90
IMPORTANCE 100
RELEVANCE 100
POSITIVE IMPACT
Investors can gain exposure to RXO through the Motley Fool Small-Cap Growth ETF (BATS:TMFS), which includes RXO in its portfolio.
The inclusion of RXO in the TMFS ETF provides investors with an opportunity to benefit from RXO's growth following the acquisition of Coyote Logistics.
CONFIDENCE 70
IMPORTANCE 50
RELEVANCE 50