Diagnostic information services provider Quest Diagnostics has closed the acquisition of 100% of the equity of LifeLabs from OMERS.
The deal, valued at around C$1.35bn including net debt, was sealed following the definitive agreement signed between Quest and OMERS earlier in July.
It is expected to bring in approximately C$970m in annual revenues for Quest.
While the transaction may slightly dilute GAAP earnings per share (EPS) due to amortisation and other intangible factors, it is expected to be $0.10–0.15 accretive to adjusted EPS in the first year post-closing.
Additional details of the transaction remain undisclosed; however, Quest said it will provide updated financial guidance for the current year as part of its third quarter 2024 results, scheduled for October.
With the completion of the deal, LifeLabs, along with its workforce of nearly 6,500, will retain its brand, management and headquarters.
Quest now aims to bolster LifeLabs by providing new expertise and resources, enhancing service offerings, and improving patient experience with better online scheduling and faster service centre processing.
In addition, Quest has committed to support LifeLabs in advancing data security, ensuring that Canadian patients' health data remains within the country.
Quest Diagnostics chairman, CEO and president Jim Davis said: “This acquisition brings together two industry leaders committed to enhancing access to diagnostic innovation for patients in North America.
“The combination of LifeLabs' strong business and deep community presence with Quest's specialised lab services and expertise creates a powerful opportunity to generate growth while improving care and outcomes for Canada's expanding and ageing population.”
Legal advisory for Quest Diagnostics was provided by McCarthy Tétrault, while Blake, Cassels & Graydon advised OMERS.
Financial advisory services for OMERS were provided by Evercore and CIBC Capital Markets.
Quest, which has nearly 50,000 employees, has a portfolio of a wide range of specialised tests in clinical areas such as Alzheimer's disease, cardiometabolic health, oncology, infectious diseases and genomics, which will now be complemented by LifeLabs' services.
LifeLabs president and CEO Charles Brown said: “Joining forces with Quest Diagnostics marks a pivotal moment for LifeLabs. Quest's extensive diagnostic capabilities and forward-thinking strategy will help the LifeLabs team enhance access to services and ultimately improve healthcare for Canadians.”
