ACQUISITIONS & DISPOSITIONS |
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| ACQUISITIONS & DISPOSITIONS |
NOTE 8. ACQUISITIONS & DISPOSITIONS
In the first quarter of 2025, we acquired Frigo-Trans, an industry-leading, complex healthcare logistics provider based in Germany. In the fourth quarter of 2025, we acquired AHG, a leading North American supply chain management company offering customized third-party logistics and specialized cold chain transportation solutions for the healthcare sector. Both acquisitions are expected to increase our complex cold-chain logistics capabilities internationally. During 2025, we also reacquired development area rights for The UPS Store.
The aggregate purchase price for all acquisitions in 2025 was approximately $2.0 billion, net of cash acquired, which is recorded within SCS. Acquisitions were funded using cash from operations. The impact of these acquisitions to our consolidated revenue and net income in 2025 was not material.
The estimated fair values of assets acquired and liabilities assumed, for AHG, are subject to change based on completion of our purchase accounting. Certain areas, including the fair value of intangibles, property, plant and equipment, equity method investments included within Other Non-Current Assets, and our estimates of tax positions, are preliminary as of December 31, 2025.
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of the acquisition date (in millions):
(1)Includes $40 million for acquisitions of reacquired development area rights for The UPS Store.
Goodwill recognized during 2025 is attributable to expected synergies from future growth. We assigned approximately $1.3 billion of goodwill to SCS and approximately $80 million to our International Package segment, the Americas reporting unit. This goodwill acquired is not expected to be deductible for income tax purposes.
Intangible assets acquired during 2025 of approximately $763 million are primarily comprised of $690 million of customer relationships (amortized over a weighted average of 15 years). Other intangible assets acquired include franchise rights, licenses, capitalized software and trade names. The carrying value of accounts receivable approximates fair value.
Acquisition-related costs in 2025 were approximately $21 million. These were expensed and included in Other expenses in our statement of consolidated income.
In the second quarter of 2025, we completed the divestiture of a business within SCS. In connection with this divestiture, we recorded a pre-tax net loss of approximately $19 million ($15 million after tax). The loss is recognized within Other expenses in our statement of consolidated income.
During 2024, the aggregate purchase price for acquisitions was $71 million, net of cash acquired, which primarily related to the acquisition of franchise development areas for The UPS Store, which are recorded as intangible assets within SCS.
In 2024, we completed the divestiture of Coyote, for cash proceeds, net of cash divested and direct transaction expenses, of $1.0 billion. These proceeds are recognized within Proceeds from disposal of businesses, property, plant and equipment in our statement of consolidated cash flows. In connection with the completion of this divestiture, we recorded a pre-tax gain of $156 million ($152 million after tax) in 2024. The gain was recognized within Other expenses in our statement of consolidated income. We reported Coyote within our Forwarding businesses in SCS.
Net assets divested of $860 million were mostly comprised of cash of $20 million, accounts receivable of $405 million, other current assets of $34 million, operating lease right-of-use assets of $69 million, goodwill of $495 million, intangible assets of $195 million and other non-current assets of $18 million. These assets were offset by accounts payable of $216 million, other current liabilities of $54 million, non-current operating leases of $68 million, and other non-current liabilities of $38 million.
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