The wave of acquisitions in the logistics sector continues with UPS’ prospective purchase of the Italian healthcare logistics provider, Bomi Group.
The deal seems to have been agreed with Bomi Group’s present shareholders on the 8th August, with UPS stating that “the transaction is expected to close by the end of the year, subject to customary regulatory review and approval”.
The Bologna based company is presently owned by the private equity company ArchiMed, which bought the company for €70m in 2019. The price that UPS has agreed to pay has not been made public yet, although rumours in the press are suggesting that the deal is valued at “several hundred million dollars”. ArchiMed said that “the agreed purchase by UPS and previous liquidity events return 70 percent of their money, on a cash-to-cash basis, to MED Platform I’s Investors”. ArchiMed capital financed the expansion of Bomi, building new warehousing capacity, buying companies through-out Europe and in South America.
This acquisition by UPS is a continuation of its focus on the pharma logistics sector and follows the purchase of Marken, a UK based specialist pharmaceutical logistics provider, in 2016. Healthcare logistics appears to have been a consistent performer for UPS and it is the primary market for its contract logistics business, with the Atlanta based company stating that it has “doubled its global footprint since 2020”.
It seems that the acquisition of Bomi was in-part motivated by UPS’ desire to continue the expansion of its in-house pharma dedicated physical infrastructure, with the purchase adding “more than 350 temperature-controlled vehicles and four million square feet (391k m2) to the UPS Healthcare global footprint”. The in-house nature of this capability is central to UPS’ market positioning, offering what it believes is a more consistent control over service quality.
‘Healthcare’ logistics has been central to the crisis of the past two years and it has experienced explosive demand. Presumably the nature of demand is in the process of returning to normal, however the supply-side is becoming more concentrated, with large integrators such as UPS having a formidable presence in the market.
Source: Transport Intelligence, 9th August 2022
Author: Thomas Cullen
GLOBAL SUPPLY CHAIN INTELLIGENCE (GSCi)