03:43 AM EDT, 06/24/2024 (MT Newswires) -- United Parcel Service ( UPS ) has agreed to sell its freight brokerage business unit, Coyote Logistics, to RXO (RXO) for about $1.03 billion in cash, the companies said in separate Sunday statements.

The deal is expected to complete by the end of 2024, subject to regulatory approval.

RXO plans to fund the transaction through a combination of equity and debt, including a $300 million equity investment from MFN Partners and a $250 million equity investment from Orbis Investments.

RXO anticipates the acquisition to be immediately and "significantly" accretive to its adjusted EPS and adjusted free cash flow, and expects annualized cost synergies of at least $25 million. The company will continue to serve UPS' brokered transportation needs until January 2030.

UPS said it will update its financial outlook once the transaction completes. RXO maintained its Q2 adjusted EBITDA guidance range of $24 million to $30 million.

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