Echo Global Logistics has received a clear vote of confidence from both Moody’s and S&P Global Ratings following its acquisition of ITS Logistics, with both agencies maintaining their existing debt ratings while upgrading the company’s outlook from stable to positive.
Although Echo is privately owned, it still has publicly traded debt, making the views of the ratings agencies particularly significant. S&P kept its rating at B-, while Moody’s affirmed Echo’s B3 corporate family rating, which broadly aligns with S&P’s B- level. Moody’s did lower one specific debt issue, but said the move was technical and tied to changes in the capital structure of the combined business.
S&P said it believes the acquisition will modestly improve Echo’s credit metrics thanks to ITS’s EBITDA contribution and what it described as a somewhat favourable funding mix, offsetting slightly weaker-than-expected recent performance at Echo itself.
Both agencies pointed to expected improvements in leverage and free cash flow. S&P said it expects Echo’s debt-to-EBITDA ratio to move into the low-6x range over the next 12 months. By its estimates, the combined company would have posted leverage of 6.8x in 2025, compared with roughly 7.1x for Echo on a standalone basis.
The agency said that improvement should be supported by recent business wins at ITS and a full-year contribution from Freightsaver, the California-based 3PL acquired by Echo in August 2025. S&P also expects EBITDA to rise significantly, estimating a $114 million increase that would materially expand the company’s adjusted EBITDA base from about $133 million in 2025 before the acquisition.
S&P did note that it remains cautious about ITS because a large share of its revenue is tied to consumer-related end markets. At the same time, it said the acquisition broadens Echo’s customer mix, complementing Echo’s focus on smaller manufacturing and wholesale accounts with ITS’s strength in high-volume ecommerce and consumer and retail freight.
The report also offered insight into scale. S&P said Echo’s brokerage revenue is expected to increase to $3.9 billion from $2.7 billion. That figure includes around $900 million tied to ITS’s drop-trailer business, which the agency said generates gross margins per load about 30% higher than traditional freight brokerage and is also growing more quickly. ITS operates an owned and leased trailer pool of around 5,000 units.
The shift in free cash flow expectations was also notable. S&P had previously estimated Echo would generate about $10 million in free cash flow in 2026, a level that could have modestly weakened liquidity. Following debt refinancing linked to the acquisition and the expected contribution from ITS, the agency now forecasts approximately $30 million in 2026 and around $50 million in 2027.
Moody’s echoed that reasoning, saying the positive outlook reflects its expectation that the combined freight service offerings of Echo and ITS will drive earnings growth, support better debt metrics and result in positive free cash flow. The agency added that both businesses increased freight volumes in 2025 and said their combined market position and cross-selling opportunities should allow them to grow faster than the broader market when freight conditions improve.
S&P also suggested Echo may not be finished with acquisitions. The agency said it still expects the company’s financial policy to include opportunistic M&A and believes Echo could continue deploying cash strategically, potentially increasing leverage again in pursuit of future deals.
