Quest Diagnostics to acquire Canada's LifeLabs for about $985 million, including debt

By Ciara Linnane

Deal is expected to close by year-end

Quest Diagnostics Inc. said Wednesday it has entered a definitive agreement with pension fund OMERS to acquire LifeLabs, a Canadian provider of community laboratory services, for about C$1.35 billion ($985 million), including net debt.

"Quest (DGX) has supported laboratories, hospitals and academic centers in Canada with specialized testing services for over two decades, including during the COVID-19 pandemic," said Jim Davis, chairman and CEO of Secaucus, N.J.-based Quest.

"This transaction is predicated on our strong belief that we can help LifeLabs accelerate growth and improve healthcare," he said.

Under the terms of the deal, LifeLabs will retain its brand, Canadian headquarters and management once the deal closes.

Quest will fund the deal using cash on hand and debt.

It expects the deal to generate about C$970 million in annual revenue and to slightly dilute per-share earnings but boost adjusted earnings in the first 12 months after closing.

The deal is expected to close by year-end.

The transaction "meets all of Quest's criteria on growth, profitability and returns," said the company.

Toronto-based OMERS, a defined-benefit pension plan with 1,000 participating employers, acquired LifeLabs in 2007.

Quest's stock was up 0.8% in early trading but is down 0.2% in the year to date, while the S&P 500 has gained 15.5%.

-Ciara Linnane

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07-03-24 0958ET

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