Quest Diagnostics to Acquire Lifelabs in $1.35B Deal

By Tamara Parker • Wednesday, July 03 15:11 • Permanent Link

Quest Diagnostics (NYSE: DGX) has recently announced its definitive agreement to acquire Lifelabs, a leading provider of laboratory diagnostic information and digital health connectivity systems in Canada, from OMERS for approximately CAN $1.35 billion (approximately USD $985 million), including net debt. The acquisition is expected to be funded through cash on hand and debt. This strategic move is aimed at enhancing diagnostic services for millions of Canadians.

Lifelabs, with over 6,500 employees, is anticipated to generate approximately CAN $970 million (approximately USD $710 million) in annual revenues post-acquisition. The transaction is expected to be slightly dilutive to GAAP earnings per share (EPS) due to amortization of intangibles and other items. However, it is projected to be accretive to adjusted EPS in the first 12 months after closing.

Over the past five years, Lifelabs has been part of the Quest-led global diagnostic network, connecting 12 leading diagnostic testing labs globally to broaden testing access and share expertise. Additionally, Lifelabs and Quest have a reference relationship where Quest provides access to select advanced diagnostic tests.

The transaction is subject to certain customary closing conditions and approvals, including Canadian regulatory approvals. Advisors for the transaction include McCarthy Tétrault LLP as the legal advisor to Quest Diagnostics, and Blake, Cassels & Graydon LLP as the legal advisor to OMERS. Evercore and CIBC Capital Markets served as financial advisors to OMERS.

Lifelabs is known for operating Canada's first commercial genetics lab and the country's largest online patient portal, with more than 8 million Canadians receiving their results online. It has been recognized as one of Canada's best employers and best employers for diversity by Forbes.

Quest Diagnostics, a leading provider of diagnostic information services, aims to leverage its expertise, innovations, and resources to strengthen the services provided by Lifelabs while ensuring continuity of service and enhancing access and innovation to meet the needs of Canada's growing and aging population.

This acquisition reflects Quest's commitment to creating a healthier world and expanding its diagnostic services to empower people, physicians, and organizations to take action to improve health outcomes. Today the company's shares have moved 3.1% to a price of $140.9. Check out the company's full 8-K submission here.

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