United Parcel Service Inc (NYSE:UPS) said it has agreed to sell its Coyote Logistics division to RXO for about $1 billion, about $0.6 billion less than it paid for the freight brokerage company.
“As UPS positions itself to become the premium small package provider and logistics partner in the world, the decision to sell our Coyote Logistics business allows an even greater focus on our core business,” UPS CEO Carol Tomé said in a statement.
The parcel delivery company expects the transaction to close by the year-end, subject to regulatory approval.
Upon the completion of the transaction, UPS said it would update its financial outlook.
Chicago-based Coyote is a third-party logistics provider which works with 100,000 network carriers and manages 10,000 loads per day.
UPS paid $1.8 billion to buy Coyote from private equity firm Warburg Pincus back in 2015.
Shares of the company traded 1.7% higher at about $139 late morning on Monday, while RXO shares had surged 23% to $25.