UPS in talks to buy Coyote, reports say

UPS is in talks to buy Coyote Logistics, which has major operations in Chattanooga, for about $1.8 billion, according to reports.

A deal for the Chicago-based provider of transport-management services could be reached as soon as this month, according to Bloomberg News. But Bloomberg said no agreement has been reached and discussions still could fall apart.

In March 2014, Coyote bought Chattanooga-based Access America Transport, which had grown in a dozen years from a startup to employ 500 people, most of them in Chattanooga.

UPS trucks are lined up Thursday, Dec. 26, 2013, at the UPS shipping facility in Chattanooga

The potential acquisition of Coyote would help UPS in the fast-growing freight brokerage business, according to The Wall Street Journal. The newspaper said shippers are switching from slower and cheaper delivery methods, and that third-party logistics companies such as Coyote grew 20 percent overall last year.

Access America was founded by Ted Alling, Allan Davis and Barry Large, former roommates at Samford University. They turned the business, Chattanooga's fastest growing venture in the past decade, into a nearly $1 billion a year company.

The Access America founders said last year that they planned to retain an interest in the merged company but wouldn't exercise any management in Coyote. They said then that they planned to focus their attention as well as the "tens of millions of dollars" they will personally reap from the transaction on the Lamp Post Group, a start-up incubator in Chattanooga.

Coyote founder and CEO Jeff Silver said at the time that officials believed the focus of the businesses was on growth. He said that only about 15 percent of the business of the two firms appeared to have overlapped in the past.

A deal between Coyote and UPS would be the third-largest logistics deal this year, as the industry goes through a wave of consolidation amid rising consumer demand, Bloomberg said. In April, FedEx Corp. agreed to buy Dutch parcel-delivery company TNT Express NV for $4.8 billion. Later that month, XPO Logistics Inc. agreed to acquire European counterpart Norbert Dentressangle SA in a deal valued at $3.53 billion including debt.