RXO shares soar on news of Coyote deal; combined company to be 3rd-biggest 3PL

FreightWaves06-24

Wall Street reacted positively to the news of RXO's acquisition of Coyote Logistics from UPS. (Photo: FreightWaves) The acquisition of Coyote Logistics by RXO announced Sunday received a rip-...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap

Leave a comment

{"i18n":{"language":"en_US"},"isChannel":false,"data":{"share":"https://ttm.financial/m/news/2446007570?lang=en_US&edition=fundamental","thumbnail":"https://s.yimg.com/uu/api/res/1.2/BN_N6DD9gLGqDcOH_j_VBw--~B/aD02NzU7dz0xMjAwO2FwcGlkPXl0YWNoeW9u/https://media.zenfs.com/en/freightwaves_373/68cb75b74a7732c554923cdc0bebaf93","is_english":true,"pubTime":"2024-06-24 23:49","share_image_url":"https://static.laohu8.com/5f26f4a48f9cb3e29be4d71d3ba8c038","id":"2446007570","market":"us","top_or_hot":-1,"title":"RXO shares soar on news of Coyote deal; combined company to be 3rd-biggest 3PL","media":"FreightWaves","content":"<div>\n<p>Wall Street reacted positively to the news of RXO's acquisition of Coyote Logistics from UPS. (Photo: FreightWaves)\n \n\nThe acquisition of Coyote Logistics by RXO announced Sunday received a rip-...</p>\n\n<a href=\"https://finance.yahoo.com/news/rxo-shares-soar-news-coyote-154900039.html\">Source Link</a>\n\n</div>\n","source":"yahoofinance","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>RXO shares soar on news of Coyote deal; combined company to be 3rd-biggest 3PL</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nRXO shares soar on news of Coyote deal; combined company to be 3rd-biggest 3PL\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-06-24 23:49 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://finance.yahoo.com/news/rxo-shares-soar-news-coyote-154900039.html><strong>FreightWaves</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Wall Street reacted positively to the news of RXO's acquisition of Coyote Logistics from UPS. (Photo: FreightWaves)\n \n\nThe acquisition of Coyote Logistics by RXO announced Sunday received a rip-...</p>\n\n<a href=\"https://finance.yahoo.com/news/rxo-shares-soar-news-coyote-154900039.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU2237438978.USD","symbol_name":"Amundi Funds US Pioneer A2 (C) USD","start_time":0,"source_url":"https://finance.yahoo.com/news/rxo-shares-soar-news-coyote-154900039.html","article_id":"2446007570","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/BN_N6DD9gLGqDcOH_j_VBw--~B/aD02NzU7dz0xMjAwO2FwcGlkPXl0YWNoeW9u/https://media.zenfs.com/en/freightwaves_373/68cb75b74a7732c554923cdc0bebaf93"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2446007570","pubTimestamp":1719244140,"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"Wall Street reacted positively to the news of RXO's acquisition of Coyote Logistics from UPS. . The acquisition of Coyote Logistics by RXO announced Sunday received a rip-roaring reception on Wall Street Monday, with the company’s stock price trading up by double-digit percentages on a move that management said will make it the third-largest freight brokerage in the country.The Wall Street applause for the deal to acquire Coyote from UPS  comes even though it involves new equity issuance to two major shareholders, MFN Partners and Orbis Investment Management Ltd., to invest $550 million for a combination of preferred and common stock. RXO also is taking on debt of $1.1 billion from Goldman Sachs for bridge loans to help complete the transaction.That lack of overlap received praise from Seidl. “We are encouraged to see that there is minimal customer overlap with Coyote’s business heavily focused on small to medium businesses and RXO’s legacy business focused on larger enterprise custome","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU2237438978.USD":"Amundi Funds US Pioneer A2 (C) USD","IE0004445015.USD":"JANUS HENDERSON BALANCED \"A2\" (USD) ACC","LU0320765489.SGD":"FTIF - Franklin Mutual US Value A Acc SGD","LU1489326972.SGD":"First Eagle Amundi International AHS-MD SGD-H","BK4022":"陆运","LU1430594728.SGD":"Eastspring Investments - Global Low Volatility Equity AS SGD","LU0070302665.USD":"FRANKLIN MUTUAL U.S. VALUE \"A\" (USD) ACC","BK4232":"货物陆运","IE0002270589.USD":"LEGG MASON CLEARBRIDGE VALUE \"A\" (USD) INC","LU0061475181.USD":"THREADNEEDLE (LUX) AMERICAN \"AU\" (USD) ACC","IE00BFSS8Q28.SGD":"Janus Henderson Balanced A Inc SGD-H","LU0985489474.SGD":"First Eagle Amundi International AHS-C SGD-H","LU0149725797.USD":"汇丰美国股市经济规模基金","LU1074936037.SGD":"JPMorgan Funds - US Value A (acc) SGD","IE00B7SZLL34.SGD":"Legg Mason ClearBridge - Value A Acc SGD-H","LU0878866978.SGD":"First Eagle Amundi International AHS-QD SGD-H","LU2133065610.SGD":"JPMorgan Investment Funds - Global Dividend A (mth) SGD","LU1585245621.USD":"EASTSPRING INV GLOBAL LOW VOLATILITY EQUITY FUND \"A\" (USD) ACC B","IE00B7KXQ091.USD":"Janus Henderson Balanced A Inc USD","LU1303367103.USD":"摩根大通多经理另类基金 A (acc)","LU1571399168.USD":"ALLSPRING GLOBAL LONG/SHORT EQUITY \"IP\" (USD) ACC","LU0211331839.USD":"FRANKLIN MUTUAL GLB DISCOVERY \"A\" (USD) ACC","RXO":"RXO INC","BK4532":"文艺复兴科技持仓","UPS":"联合包裹","LU0433182093.SGD":"First Eagle Amundi International AS-C SGD","LU2098885051.SGD":"JPMorgan Funds - Multi-Manager Alternatives A (acc) SGD","LU0320765646.SGD":"FTIF - Franklin Income A MDIS SGD-H1","BK4588":"碎股","IE00BFSS7M15.SGD":"Janus Henderson Balanced A Acc SGD-H","BK4567":"ESG概念","CHRW":"罗宾逊物流","BK4585":"ETF&股票定投概念","BK4534":"瑞士信贷持仓","IE00BJJMRX11.SGD":"Janus Henderson Balanced A Acc SGD","IE00B19Z3581.USD":"Legg Mason ClearBridge - Value A Acc USD","LU0068578508.USD":"First Eagle Amundi International Cl AU-C USD","XPO":"XPO Logistics","LU0208291251.USD":"FRANKLIN MUTUAL U.S. VALUE \"A\" (USD) INC","IE00B19Z3B42.SGD":"Legg Mason ClearBridge - Value A Acc SGD","LU1162221912.USD":"FRANKLIN INCOME \"A\" (USD) ACC","IE00BJJMRY28.SGD":"Janus Henderson Balanced A Inc SGD","BK4559":"巴菲特持仓","BK4550":"红杉资本持仓","BK4131":"航空货运与物流"},"translate_title":"Coyote交易消息传出后，RXO股价飙升；合并后的公司将成为第三大第三方物流","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"XPO":1,"UPS":1,"RXO":1,"CHRW":1},"content_text":"Wall Street reacted positively to the news of RXO's acquisition of Coyote Logistics from UPS. (Photo: FreightWaves)\n \n\nThe acquisition of Coyote Logistics by RXO announced Sunday received a rip-roaring reception on Wall Street Monday, with the company’s stock price trading up by double-digit percentages on a move that management said will make it the third-largest freight brokerage in the country.\nAt about 11:15 a.m. EDT, RXO stock was up about 21.9% to to $24.64, a gain of $4.43. It hit a 52-week high on the day at $25.07, according to Barchart.\nThe Wall Street applause for the deal to acquire Coyote from UPS (NYSE: UPS) comes even though it involves new equity issuance to two major shareholders, MFN Partners and Orbis Investment Management Ltd., to invest $550 million for a combination of preferred and common stock. RXO also is taking on debt of $1.1 billion from Goldman Sachs for bridge loans to help complete the transaction.\nJason Seidl of TD Cowen said in a report Monday that RXO (NYSE: RXO) had acquired Coyote for a “reasonable price” of estimated nine times projected earnings before income, taxes, depreciation and amortization in 2025. The price of $1.025 billion was about 12 times what RXO disclosed was Coyote EBITDA of about $86 million in 2023. \nSeidl and RXO management, on a Monday morning call with analysts, said the acquisition of Coyote will move the company to the No. 3 brokerage. While no other companies’ names were identified, the top two are widely believed to be C.H. Robinson (NASDAQ: CHRW) and TQL.\nRXO’s full-year revenue in 2023 was $3.93 billion. On the analyst call, RXO CEO Drew Wilkerson said Coyote revenue last year was about $3.2 billion.\nOther details about Coyote that emerged from the conference call: It generated about $470 million in gross margin last year, for a margin percentage of about 14.5% of revenue.\nEBITDA for Coyote last year was about $86 million, and combined, RXO and Coyote would have generated about $218 million in EBITDA last year. \nSynergies in the deal were estimated by RXO at $25 million, and they are all expected to be realized within a year after the closing, which is expected by the end of the year.\nWilkerson said the acquisition of Coyote will increase the number of users of its service who do more than $1 million in revenue with the brokerage by about 80%, though the average Coyote customer tends to be smaller than the average RXO customer.\nThe combined company will have a more diversified book of business as well, Wilkerson added. Coyote’s top two verticals are food and beverage and transportation; RXO’s business has tended toward retail and industrial/manufacturing. “There’s minimal overlap across our largest customers,” he said.\nThat lack of overlap received praise from Seidl. “We are encouraged to see that there is minimal customer overlap with Coyote’s business heavily focused on small to medium businesses and RXO’s legacy business focused on larger enterprise customers,” Seidl said. “There are also differences in terms of carrier base. Coyote tends to focus on smaller carriers while RXO has access to larger fleets.”\nOne customer that is sticking around: UPS. 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.\nSeidl said he was raising his estimated earnings for RXO in 2025, when Coyote will be in the field, to an EBITDA of $292 million, up from $193 million without Coyote. There are no changes in Seidl’s estimate for 2024, given that the deal is not likely to close until the fourth quarter. \nAlthough RXO has boasted about its organic growth, 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.\nAnd he said he does not expect the consolidation trend to end anytime soon. “We believe there will be an increase in consolidation in the next five years, and the winner will be whoever offers the deepest customer relationships, the best technology and strong financial protocols,” Wilkerson said.\nCFO Jamie Harris, on the call, repeated what RXO said Sunday when it first announced the deal: The acquisition of Coyote will be “immediately and significantly accretive to adjusted earnings per share and adjusted cash flow.”\nSeveral times during the call, RXO management touted the benefit from the deal of taking the combined fixed cost structure and spreading it out over a wider book of business. “We’ll be able to continue to optimize our cost structure and leverage our fixed costs more effectively,” Harris said.\nJared Weisfeld, RXO’s chief strategy officer, said Coyote’s business is about 79% truckload, with the balance in less-than-truckload and to a lesser extent intermodal. He added that he expects the acquisition will help RXO grow its footprint in small to medium business and the “middle market.”\nA merger of two brokerage companies always raises the question of the pace and direction of technology integration. In response to an analyst question, Wilkerson said Coyote “has put investments into technology and they have a strong operating system.” \n“We’ve got an opportunity to be able to take the best of both worlds, to continue to have the best transportation technology in the world.”\nMore articles by John Kingston\nNFI CEO Brown indicted in sweeping New Jersey case against political giant\nS&P cuts Forward Air debt rating again; 3 key agencies now at same low level\nTruck transportation jobs down in May; total now matches November\nThe post RXO shares soar on news of Coyote deal; combined company to be 3rd-biggest 3PL appeared first on FreightWaves.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.24.2","shortVersion":"4.24.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2446007570"}