UPS is making another big move in healthcare by buying Canada’s Andlauer Healthcare Group (AHG) for $1.6 billion. The all-cash deal will bring AHG’s temperature-controlled warehouses and trucking network into UPS’s healthcare business, helping the company handle sensitive medical shipments across North America.

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AHG, based in Vaughan, Ontario, specializes in moving pharmaceutical products, vaccines, and other temperature-sensitive treatments that require cold storage. It operates nine distribution centers and 22 branches across Canada. In 2024, the company pulled in around $468 million in revenue, more than half of it from ground transportation.

UPS says this acquisition will help it keep up with rising demand for more complex medical deliveries. “Next-generation treatments are driving more complexity than ever,” said Kate Gutmann, Executive Vice President and President of International, Healthcare and Supply Chain Solutions at UPS. “Andlauer Healthcare Group will help us deliver expanded capability to our customers, driving best in class patient outcomes while contributing to our overall growth plans.”

Michael Andlauer, the company’s founder and CEO, will continue to lead the business as part of UPS. He’ll take charge of UPS Canada Healthcare while overseeing AHG’s day-to-day operations.

“UPS Healthcare and AHG employees share a similar customer and patient-centric culture with a relentless focus on quality,” Andlauer said. “Once the transaction is completed, the businesses will offer an even broader set of specialized logistics services to customers throughout Canada.”

UPS says this is part of its ongoing plan to become the top global player in healthcare logistics. The company has been a presence in Canada since 1975 and now employs about 13,500 people there. The AHG deal is seen as a major step toward expanding its healthcare footprint in the country and beyond.