United Parcel Service Inc said on Monday it would buy Italy-based healthcare logistics firm Bomi Group to bolster its capability in delivering medicines that require cold storage.
The U.S. delivery firm is focusing on high-margin businesses to offset declining volumes as the pandemic-fuelled e-commerce boom softens, having expanded its temperature-controlled supply-chain logistics to support the deployment of COVID-19 vaccines globally.
Founded in 1985 in Milan’s Lombardy region, Bomi Group helps healthcare providers with warehousing and logistics for sensitive pharmaceutical products across Europe and South America.
The deal will “significantly improve our healthcare customers’ ability to continue to develop and deliver life-saving innovations,” UPS said in a statement.
Atlanta-based UPS did not disclose financial details of the transaction, but the Wall Street Journal, which first reported the news on Sunday, said it was for several hundred million dollars.
Two sources close to the matter told Reuters the deal was worth between $500 million and $1 billion.
The world’s biggest package delivery firm expects to add more than 350 temperature-controlled vehicles and four million square feet (0.37 square kilometer) across 14 countries from the deal.
“While a relatively small deal for UPS, interest in the emerging area of healthcare logistics remains strong even as the world moves on from the pandemic”, said Peter McNally, Global Sector Lead for Industrials Materials and Energy at research firm Third Bridge.
Europe is the largest region outside of the United States where UPS operates, and it accounted for nearly half of the company’s international package segment revenue last year, according to filings.
Bomi’s Chief Executive Marco Ruini will continue to head the Italian firm after the deal, UPS said, adding that Bomi’s employees would continue in the combined organisation.
JPMorgan acted as the sole adviser to UPS.