(Reuters) -Parcel giant UPS said on Thursday it would buy Canada’s Andlauer Healthcare Group for $1.6 billion, boosting its healthcare logistics business.
AHG operates nine distribution centers and 22 branches across Canada, offering services related to third-party logistics and specialized transportation solutions for the healthcare sector.
Under the terms of the agreement, AHG shareholders will receive CAD $55 per share in cash, representing a premium of 31% to the stock’s last close of CAD $41.96.
UPS said the deal will extend its global portfolio of cold chain capabilities available to its healthcare customers such as temperature-controlled and precision logistics solutions.
The parcel giant has been looking to drive both organic and inorganic growth in the sectors such as healthcare.
In January, UPS completed the acquisition of Germany-based Frigo-Trans and its sister company Biotech & Pharma Logistics, which provide temperature-controlled and time-critical healthcare transportation in Europe.
The carrier has been focusing on increasing profit per package and announced in January it plans to shrink profit-denting volumes of its largest customer Amazon.com.
“We expect volume from this customer to decline to approximately 50% of year-end 2024 levels by mid-2026. We are making a deliberate shift in our business to increase our focus on growing higher yielding volume,” the company had said in an annual SEC filing from February.
The acquisition of AHG is expected to close by the second half of the year.
(Reporting by Nathan Gomes and Aishwarya Jain in Bengaluru; Editing by Sriraj Kalluvila and Krishna Chandra Eluri)
Comments