FedEx plans to acquire logistical service company Pipeworks, its largest and most valuable business, for an undisclosed sum, a person with knowledge of the transaction said.
The deal is expected to close by the end of the year, according to the person, who asked not to be identified because the terms of the deal are private.
Pipeworks operates the FedEx Express courier fleet, which has grown by more than 40% over the past two years.
The transaction is expected give FedEx a more stable revenue stream for the next two years, the person said.
Pipets fleet is in need of repair and maintenance and has suffered from poor reliability, the source said.
Pipeworks has operations in more than 30 countries and employs more than 700,000 people in more-than 100 countries.
The deal includes Pipeworks’ logistics division, which handles all the business of transporting packages from its headquarters in Chicago to customers in more general locations in the United States and Europe.
A Pegasus spokeswoman said in a statement to Reuters on Friday that the company was “very excited” to acquire Pipeworks.
FedEx also will acquire the company’s logistics operations, the company said in the statement.
The deal is one of a flurry of corporate acquisitions that have taken place in the last three months, a trend that has been spurred by an explosion in the use of digital technology in delivering packages and the rise of the e-commerce market, which offers more flexibility for businesses to compete with one another.