Quest Diagnostics plans to acquire Canada-based community laboratory provider LifeLabs in a deal worth nearly $1 billion.
Under the agreement announced July 3 , the Secaucus-headquartered testing provider would purchase the business from OMERS, a pension fund with more than 1,000 participating employers.
As part of the transaction, Quest will take 100% equity of LifeLabs. It will fund the $985 million deal through cash on hand and debt. The purchase is anticipated to close by the end of 2024.
After that, LifeLabs will retain its brand, Toronto headquarters and management structure. Quest also said it will infuse “new expertise, innovations and resources to strengthen the services providedby LifeLabs’ more than 6,500 employees.”
Planned improvements include upgrades to online appointment scheduling and faster patient service center processing. Additionally, Quest expects to help accelerate data security enhancements while also ensuring Canadian patients’ health data remains in Canada.
The acquisition is expected to generate roughly $710 million in annual revenues for Quest.
'The right partner'
Quest President and CEO
Jim Davis said, "This transaction is predicated on our strong belief that we can help LifeLabs accelerate growth and improve healthcare. 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."
The companies already have an established relationship. LifeLabs has participated for the past five years in Quest’s global diagnostic network.
Charles Brown, president and CEO, LifeLabs, described Quest as “the right partner to build on the strengths of LifeLabs and align with our strategic path, which focuses on enhancing the accessibility and quality of services that we provide to millions of Canadians.”
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"We know and respect Quest, as we share similar cultures and values and a productive test-reference relationship. Together, we'll grow LifeLabs and provide more Canadians with access to the advanced diagnostics they rely on, closer to home,” he said.
The announcement comes about a month after
Quest completed its acquisition of key assets from Boston biotech PathAI Diagnostics . Quest said the move is part of a goal to accelerate the use of artificial intelligence to improve quality, speed, and efficiency in diagnosing cancer and other diseases.
Quest followed that acquisition by
announcing it will buy some lab assets from Allina Health , a nonprofit health care system in Minneapolis.
Through that agreement, Quest will provide lab services for patients and providers in Minnesota and western Wisconsin with the goal of improving access and affordability.
Financial terms for either deal were not disclosed.
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