Parcel giant UPS said on Thursday it would buy Canada's Andlauer Healthcare Group in an all-cash deal valued at $1.6 billion, boosting its healthcare logistics business.

Healthcare shipments a $20 billion lifeline for UPS as it looks to defy slowdown Specialized logistics services, unlike standard brown-box delivery, have appealing profit margins.

UPS Inc. has been quietly building a health care empire to offset stagnating revenue in its core package delivery business.