Quest Diagnostics to Acquire LifeLabs from OMERS, Enhancing Diagnostic Services for Canadians

ECAUCUS, NJ, and TORONTO, ON, July 3, 2024 /PRNewswire/ — Quest Diagnostics (NYSE: DGX), a leading provider of diagnostic information services, today announced a definitive agreement with OMERS to acquire LifeLabs, a trusted provider of community laboratory tests for millions of Canadians, for a value of approximately CAD$1.35 billion (approximately USD$985 million), including net debt.

“Quest 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, CEO and president, Quest Diagnostics. “This transaction is predicated on our strong belief that we can help LifeLabs accelerate growth and improve health care. 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.” 

LifeLabs will retain its brand, Canadian headquarters, and management after the acquisition is closed. Quest will provide LifeLabs with new expertise, innovations, and resources to strengthen the services provided by LifeLabs’s more than 6,500 employees. This will include improved online appointment scheduling and faster patient service center processing. Quest also expects to help accelerate LifeLabs’s data security enhancements while ensuring Canadian patients’ health data remains in Canada.

“OMERS is proud to have supported LifeLabs’s growth over the last 17 years. Our purchase in 2007 and subsequent investments have helped LifeLabs grow into a great Canadian success story,” said Michael Hill, executive vice president and global head of infrastructure of OMERS. “Quest is uniquely equipped to expand the service offering at LifeLabs, bringing new innovations to this market while extending access for patients in Canada.”

Quest has recently introduced several new tests requiring specialized skills, science, and technology, including in Alzheimer’s disease, women’s health (particularly prenatal and hereditary genetics), oncology and advanced cardiometabolic health.

“Quest is 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,” said Charles Brown, president and CEO, LifeLabs. “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. We sincerely thank OMERS for its investment, leadership, and valued collaboration over 17 years.”

The two companies already have an established relationship. Over the past five years, LifeLabs has participated in the Quest-led Global Diagnostic Network, which connects 12 of the leading diagnostic testing labs globally to broaden testing access and share expertise. LifeLabs and Quest also have a reference relationship through which Quest provides access to select advanced diagnostic tests.

Transaction details

Quest will acquire 100 percent of the equity of LifeLabs and expects to fund the acquisition through cash on hand and debt. The company expects the transaction to generate approximately CAD$970 million (approximately USD$710 million) in annual revenues and to be slightly dilutive to GAAP earnings per share (EPS), due primarily to amortization of intangibles and other items, but accretive to adjusted EPS in the first 12 months after closing. The transaction meets all of Quest’s criteria on growth, profitability, and returns. The parties expect to complete the transaction by the end of the year, subject to certain customary closing conditions and approvals, including Canadian regulatory approvals. Additional terms were not disclosed.

- This press release was originally published by Quest Diagnostics