UPS broadens network with double health care acquisition
UPS (NYSE: UPS) has completed an acquisition of Frigo-Trans and its sister company BPL, a leader in health care logistics solutions across Europe. Terms of the deal were not disclosed.
In a news release, the company said it is looking to enhance the end-to-end capabilities for UPS Healthcare customers, which have seen rising demand for temperature-controlled and time-cricial logistics solutions on a global scale.
“Frigo-Trans’ network includes temperature-controlled warehousing ranging from cryopreservation (-196°C) to ambient (+15° to +25°C) as well as Pan-European cold chain transportation. This combined with the logistics solutions brought by BPL’s time-critical freight forwarding capabilities further enhances UPS Healthcare solutions for customers in Europe,” said the company.
Known for its small package business, UPS has been consistently investing in the health care sector. By the end of 2023, UPS Healthcare was a $10 billion business, accounting for one-tenth of total revenue. The company aims to double that number by 2026, primarily through acquisitions and new ventures.
“The fast-paced innovation in the pharmaceutical industry is creating the need to have more integrated cold and frozen supply chains,” said Kate Gutmann, UPS EVP and president of international, health care and supply chain solutions. “Frigo-Trans will help deepen our portfolio of solutions for our customers and accelerate our journey to become the number one complex healthcare logistics provider in the world addressing their needs.”
The health care industry is less subject to economic cycles and more focused on the progression and development of the industry as a whole. According to McKinsey and Co, “healthcare profit pools will grow at a 7 percent CAGR, from $583 billion in 2022 to $819 billion in 2027.”
Health care is moving toward a more personalized model with an emphasis on convenience to the patient.
Gutmann said in March at the 2024 Investor and Analyst Day presentation, “the health care logistics market is a major strategic move for UPS because the demand of health care is growing, and health care companies of all sizes are rapidly innovating to keep pace with the needs of an aging population and problems related to chronic disease. For example, new medical devices, especially ones suitable for home use, are on the rise.”
UPS is specifically targeting cold chain, clinical advanced therapies, labs and diagnostics, pharma, home health care, and medical devices – essentially products or lab samples that are time- and temperature-sensitive.
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