Quest Diagnostics to buy Canada’s LifeLabs for $985m

Quest Diagnostics said on Wednesday that it has agreed to buy LifeLabs, a Canadian provider of community laboratory tests, for about $985m including debt.

The business will be bought from the Ontario Municipal Employees Retirement System (OMERS), which is one of the largest pension plans in Canada.

Quest said 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.

Quest Diagnostics chairman, chief executive and president, Jim Davis, said: "Quest has supported laboratories, hospitals and academic centres in Canada with specialised testing services for over two decades, including during the Covid-19 pandemic.

"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."

Quest expects the deal to generate about $710m in annual revenues and to be slightly dilutive to GAAP earnings per share, mainly due to amortisation of intangibles and other items, but accretive to adjusted EPS in the first 12 months after closing.