Toronto-based public pension fund manager Ontario Municipal Employees Retirement System (OMERS) has entered into an agreement to sell medical testing company LifeLabs to Quest Diagnostics for $1.35 billion CAD (approximately $985 million USD).
Quest said it expects the LifeLabs transaction to generate approximately $970 million CAD in annual revenues.
Quest, a Secaucus, N.J.-based lab testing company, will acquire a 100 percent equity stake in LifeLabs, including its outstanding net debt, and expects to fund the acquisition through a combination of cash on hand and debt. Quest said LifeLabs will retain its brand, Toronto headquarters, and management after the acquisition is closed. The transaction is expected to close by the end of the year.
UPDATE (08/26/2024): On Aug. 26, 2024, Quest announced it had received all necessary approvals and officially acquired a 100 percent equity stake of Lifelabs for approximately $1.35 billion CAD. Quest added that LifeLabs and its more than 6,500 employees will continue to operate under the LifeLabs brand with the same management team and headquarters.
“This transaction is predicated on our strong belief that we can help LifeLabs accelerate growth and improve healthcare,” Quest president and CEO Jim Davis said in a statement. “We are committed to working with the LifeLabs team to ensure service continuity and enhance access and innovation to meet the needs of Canada’s growing and aging population.”
Quest said it expects the LifeLabs transaction to generate approximately $970 million CAD in annual revenues. Quest added that it will provide LifeLabs with its expertise and resources, including improvements to online appointment scheduling, patient service centre processing, and data security.
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Much like Quest, LifeLabs provides laboratory testing, diagnostics, and digital health systems across Ontario, British Columbia, and Saskatechwan. LifeLabs previously partnered with Toronto-based virtual care platform Maple in 2019, which brought some of LifeLabs’s virtual care offerings to Maple users.
Earlier this year, LifeLabs began paying out the settlement of a 2019 class-action lawsuit after hackers gained access to the personal data of up to 15 million customers. The judge ruled that the data was not inappropriately used and no members of the class suffered harm, according to CBC.
OMERS has owned LifeLabs since 2007, but earlier this year The Globe and Mail reported that the pension fund was looking for a buyer after investing more than $2.5 billion into the company. The two potential suitors that surfaced throughout the process were Quest and the Vaughan, Ont.-based medical logistics firm Andlauer Healthcare Group, The Globe and Mail also reported.
“OMERS is proud to have supported LifeLabs’ growth over the last 17 years,” OMERS executive vice president Michael Hill said in a statement. “Our purchase in 2007 and subsequent investments have helped LifeLabs grow into a great Canadian success story.”
Feature image courtesy Ani Kolleshi via Unsplash.