Dive Brief:
- UPS will acquire Andlauer Healthcare Group for $1.6 billion, advancing the company's goal to grow its healthcare logistics services, according to an announcement Thursday.
- AHG, headquartered in Canada, serves healthcare manufacturers and distributors in North America with a mix of supply chain services. The deal's closure is targeted for the second half of 2025 and is subject to approval from regulators and AHG shareholders.
- "This acquisition marks another important step in our declaration to be the number one complex healthcare logistics and premium international logistics provider in the world," Kate Gutmann, UPS’ EVP and president of International, Healthcare and Supply Chain Solutions, said in the release.
Dive Insight:
The deal will strengthen UPS' portfolio of end-to-end cold chain services for healthcare customers, as the company will be able to leverage AHG's facilities and specialized transportation for temperature-sensitive products, the news release said.
AHG operates 31 facilities equipped with temperature control and monitoring systems in Canada, according to its website. In the U.S., AHG provides healthcare transportation services in the contiguous 48 states through its trucking subsidiaries Skelton USA and T.F. Boyle Transportation.
UPS already has experience working with AHG, being one of the third-party logistics clients AHG highlighted in a March investor presentation. AHG founder and CEO Michael Andlauer will lead UPS Canada Healthcare and AHG following the deal's closure.
“UPS Healthcare and AHG employees share a similar customer and patient-centric culture with a relentless focus on quality,” Andlauer said in the release. “Once the transaction is completed, the businesses will offer an even broader set of specialized logistics services to customers throughout Canada.”
Bolstering healthcare logistics capabilities is a high priority for UPS and other carriers, as the sector is seeing growing demand and generally offers better margins than home deliveries.
UPS' healthcare revenue in 2024 totaled about $10.5 billion in 2024, CEO Carol Tomé said on a January earnings call. Through acquisitions like AHG and organic growth, UPS aims to increase its healthcare revenue to $20 billion by 2026.
