United Parcel Service Inc. said Monday it agreed to acquire clinical logistics company Marken Ltd., deepening its push into the profitable business of medical deliveries.
The move by UPS into the highly specialized industry could help it expand its express delivery business at a time when many of its traditional industrial and retail customers opt for slower, cheaper shipping options.
Closely held Marken specializes in transporting clinical trial materials and medicine between 49,000 clinical trial locations around the world, work that is particularly sensitive in terms of time and temperature.
UPS didn't disclose how much it paid for Durham, N.C.-based Marken, which employs more than 650 people and manages 50,000 drug and biological shipments a month.
With the deal, UPS will roughly double its number of health-care-dedicated facilities to more than 100 around the world. The parcel delivery giant has made several acquisitions in health-care logistics in recent years to compete with other companies including FedEx Corp.
"One of the things UPS and FedEx are dealing with is shippers increasingly want to pay less to go slower. [Clinical logistics] is one industry that doesn't have trade-downs," said David Vernon, a transportation analyst at Sanford Bernstein.
Marken had about $45 million in earnings before interest, taxes, depreciation and amortization in 2015, according to people familiar with the matter.
Marken underwent a massive restructuring in 2012, ending up in the hands of creditors and wiping out some 450 million euros ($496 million) in equity held by private equity backer Apax Partners. Apax announced its investment in late 2009, but the ?950 million deal was hurt by consolidation in the logistics market and the global economic downturn.
Wes Wheeler, Marken's chief executive, said in April that the company was back on track and growing "at a very rapid pace."
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(END) Dow Jones Newswires
November 07, 2016 13:15 ET (18:15 GMT)
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