Quest Diagnostics Completes Acquisition of LifeLabs, Enhancing Access to Diagnostic Innovation
Quest Diagnostics has completed its acquisition of LifeLabs from OMERS for approximately CAN $1.35 billion (USD $1 billion), including net debt. The transaction aims to enhance access to diagnostic innovation in North America. LifeLabs will continue to operate under its brand with the same management team and headquarters, while benefiting from Quest's expertise and resources.
The acquisition is expected to generate about CAN $970 million (USD $710 million) in annual revenues. It is anticipated to be slightly dilutive to GAAP EPS but $0.10-$0.15 accretive to adjusted EPS in the first 12 months after closing. Quest will provide updated financial guidance for 2024 in its Q3 earnings call in October.
Quest Diagnostics ha completato l'acquisizione di LifeLabs da OMERS per circa 1,35 miliardi di dollari canadesi (1 miliardo di dollari statunitensi), inclusi i debiti netti. La transazione mira a migliorare l'accesso all'innovazione diagnostica in Nord America. LifeLabs continuerà a operare con il proprio marchio, mantenendo lo stesso team di gestione e la sede centrale, beneficiando nel contempo dell'esperienza e delle risorse di Quest.
L'acquisizione dovrebbe generare circa 970 milioni di dollari canadesi (710 milioni di dollari statunitensi) in ricavi annuali. Si prevede che sarà leggermente diluitiva per l'EPS GAAP, ma accrescerà di $0,10-$0,15 l'EPS rettificato nei primi 12 mesi dopo la chiusura. Quest fornirà aggiornamenti sulle previsioni finanziarie per il 2024 nella sua chiamata sugli utili del Q3 in ottobre.
Quest Diagnostics ha completado la adquisición de LifeLabs de OMERS por aproximadamente 1,35 mil millones de dólares canadienses (1 mil millones de dólares estadounidenses), incluyendo la deuda neta. La transacción tiene como objetivo mejorar el acceso a la innovación diagnóstica en América del Norte. LifeLabs continuará operando bajo su marca con el mismo equipo de gestión y sede central, mientras se beneficia de la experiencia y recursos de Quest.
Se espera que la adquisición genere alrededor de 970 millones de dólares canadienses (710 millones de dólares estadounidenses) en ingresos anuales. Se anticipa que será ligeramente dilutiva para el EPS GAAP, pero que aumentará en $0,10-$0,15 el EPS ajustado en los primeros 12 meses después del cierre. Quest proporcionará orientación financiera actualizada para 2024 en su llamada de ganancias del tercer trimestre en octubre.
Quest Diagnostics는 OMERS로부터 LifeLabs를 약 13.5억 캐나다 달러(10억 미국 달러)에 인수 완료하였습니다. 이 거래는 북미에서 진단 혁신에 대한 접근성을 향상시키는 것을 목표로 하고 있습니다. LifeLabs는 자사의 브랜드로 계속 운영됩니다며, 동일한 경영진과 본사를 유지하되 Quest의 전문성과 자원을 활용하게 됩니다.
이번 인수는 연간 약 9.7억 캐나다 달러(7.1억 미국 달러)의 수익을 발생시킬 것으로 예상됩니다. GAAP EPS에는 약간 희석될 것으로 보이나, 종료 후 첫 12개월 안에는 조정된 EPS에 $0.10-$0.15의 증가 효과를 줄 것으로 예상됩니다. Quest는 10월에 열리는 3분기 실적 발표에서 2024년 재무 지침을 업데이트할 계획입니다.
Quest Diagnostics a finalisé son acquisition de LifeLabs auprès d'OMERS pour environ 1,35 milliard de dollars canadiens (1 milliard de dollars américains), y compris la dette nette. La transaction vise à améliorer l'accès à l'innovation diagnostique en Amérique du Nord. LifeLabs continuera d'opérer sous sa propre marque, avec la même équipe de direction et le même siège social, tout en bénéficiant de l'expertise et des ressources de Quest.
On s'attend à ce que l'acquisition génère environ 970 millions de dollars canadiens (710 millions de dollars américains) de revenus annuels. Il est prévu qu'elle soit légèrement dilutive pour le BPA GAAP, mais qu'elle soit accretive de 0,10 $ à 0,15 $ pour le BPA ajusté au cours des 12 premiers mois suivant la clôture. Quest fournira des orientations financières mises à jour pour 2024 lors de sa conférence téléphonique sur les résultats du troisième trimestre en octobre.
Quest Diagnostics hat die Übernahme von LifeLabs von OMERS für etwa 1,35 Milliarden kanadische Dollar (1 Milliarde US-Dollar) abgeschlossen, einschließlich der Nettoverschuldung. Die Transaktion zielt darauf ab, den Zugang zu diagnostischen Innovationen in Nordamerika zu verbessern. LifeLabs wird weiterhin unter seiner Marke operieren, mit dem gleichen Management-Team und Hauptsitz, während es von der Expertise und den Ressourcen von Quest profitiert.
Die Übernahme wird voraussichtlich etwa 970 Millionen kanadische Dollar (710 Millionen US-Dollar) an jährlichen Einnahmen generieren. Es wird erwartet, dass sie leicht verwässernd für das GAAP EPS ist, aber das angepasste EPS in den ersten 12 Monaten nach dem Abschluss um $0,10-$0,15 erhöhen wird. Quest wird im Oktober während seines Q3-Ergebniskonferenz aktualisierte Finanzprognosen für 2024 bereitstellen.
- Acquisition valued at approximately CAN $1.35 billion (USD $1 billion)
- Expected to generate CAN $970 million (USD $710 million) in annual revenues
- Anticipated to be $0.10-$0.15 accretive to adjusted EPS in the first 12 months
- Enhances access to specialized diagnostic services in Canada
- Strengthens Quest's presence in the North American market
- Slightly dilutive to GAAP earnings per share due to amortization of intangibles
- Integration challenges may arise from combining two large organizations
Insights
Quest Diagnostics' acquisition of LifeLabs for
The transaction aligns with Quest's growth strategy, expanding its presence in the Canadian market and leveraging LifeLabs' strong community presence. This could lead to increased market share and diversification of revenue streams. However, investors should monitor integration costs and the realization of synergies, as these will be important for long-term value creation.
This acquisition positions Quest Diagnostics strategically in the Canadian healthcare landscape, tapping into an aging population with increasing diagnostic needs. By combining LifeLabs' local expertise with Quest's specialized testing capabilities, the merged entity can offer a more comprehensive suite of diagnostic services. This could lead to improved patient care and potentially higher reimbursement rates for advanced tests.
The focus on enhancing online scheduling and processing speed addresses growing consumer demands for convenience in healthcare. Moreover, the commitment to keep Canadian patient data within the country is important for regulatory compliance and public trust. As healthcare systems globally push for more preventive and personalized medicine, this merger could catalyze innovation in diagnostic services, potentially leading to new revenue streams and market opportunities.
The acquisition of LifeLabs by Quest Diagnostics represents a significant shift in the North American diagnostic services market. This move not only expands Quest's geographical footprint but also strengthens its competitive position against other major players in the industry. The retention of the LifeLabs brand and management team is a smart strategy to maintain continuity and leverage existing customer relationships.
However, the success of this acquisition will largely depend on how well Quest can integrate LifeLabs' operations and culture while delivering on promised synergies. Investors should watch for metrics on cost savings, revenue growth and market share gains in the coming quarters. Additionally, the potential for cross-selling specialized tests in the Canadian market could be a significant growth driver, especially given the aging population and increasing demand for advanced diagnostic services.
"This acquisition brings together two industry leaders committed to enhancing access to diagnostic innovation for patients in
Quest provides a comprehensive offering of tests requiring specialized skills, science, and technology in clinical areas such as cardiometabolic health, infectious diseases, Alzheimer's disease, oncology and genomics.
"Joining forces with Quest Diagnostics marks a pivotal moment for LifeLabs. Quest's extensive diagnostic capabilities and forward-thinking strategy will help the LifeLabs team enhance access to services and ultimately improve healthcare for Canadians," said Charles Brown, President and CEO of LifeLabs.
LifeLabs and its more than 6,500 employees will continue to operate under the LifeLabs brand and with the same management team and headquarters. Quest will provide LifeLabs with new expertise, innovations and resources to strengthen the services provided by LifeLabs. In addition to fostering greater access to specialized tests, the two companies will work together to improve online appointment scheduling and speed patient service centre processing. Quest will also support LifeLabs' data security enhancements while ensuring Canadian patients' health data remains in Canada.
"OMERS is proud to have supported and fostered LifeLabs' growth into the prominent Canadian healthcare institution it is today," said Michael Hill, Executive Vice President and Global Head of OMERS Infrastructure. "This transaction represents a significant achievement for OMERS and its members. We extend our best wishes to Quest and LifeLabs as they embark on their shared journey towards future success and innovation supporting patient care."
Transaction Details
Quest has acquired
Advisors
McCarthy Tétrault LLP served as legal advisor to Quest Diagnostics. Blake, Cassels & Graydon LLP served as legal advisor to OMERS. Evercore and CIBC Capital Markets served as financial advisors to OMERS.
About LifeLabs
LifeLabs is
About OMERS
OMERS is a jointly sponsored, defined benefit pension plan, with 1,000 participating employers ranging from large cities to local agencies, and over 600,000 active, deferred and retired members. Our members include union and non-union employees of municipalities, school boards, local boards, transit systems, electrical utilities, emergency services and children's aid societies across
About Quest Diagnostics
Quest Diagnostics works across the healthcare ecosystem to create a healthier world, one life at a time. We provide diagnostic insights from the results of our laboratory testing to empower people, physicians and organizations to take action to improve health outcomes. Our nearly 50,000 employees understand that, in the right hands and with the right context, our diagnostic insights can inspire actions that transform lives and create a healthier world. www.QuestDiagnostics.com.
Note on Non-GAAP Financial Measures
In this press release, we (Quest Diagnostics or the Company) present financial information with respect to our projected adjusted EPS following the expected acquisition of LifeLabs. Projected adjusted EPS is a non-GAAP financial measure, with projected diluted EPS as its most comparable GAAP financial measure. In calculating projected adjusted EPS we exclude special items such as restructuring and integration charges, amortization expense, excess tax benefits ("ETB") associated with stock-based compensation, gains and losses associated with changes in the carrying value of our strategic investments, and other items from projected diluted EPS. Projected adjusted EPS should not be considered as an alternative to projected diluted EPS. Management is presenting projected adjusted EPS because it believes it is useful to investors and analysts to evaluate the impact of the expected acquisition of LifeLabs. The Company believes that a quantitative reconciliation of projected adjusted EPS to projected diluted EPS cannot be presented at this time without unreasonable efforts due to the unpredictability and uncertainty of the amounts and timing of events affecting the items we exclude from projected diluted EPS, including acquisition-related transaction and integration costs, the purchase price allocation which is performed based on facts and circumstances as of the acquisition closing date, and the accounting treatment and valuation of intangible assets that are expected to be acquired. Material changes to any one of the items could result in a significant adjustment from projected diluted EPS.
Forward Looking Statements
The statements in this press release which are not historical facts may be forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date that they are made and which reflect management's current projections, expectations or beliefs and which involve risks and uncertainties that could cause actual results and outcomes to be materially different. Risks and uncertainties that may affect the future results of the company include, but are not limited to, risks and uncertainties related to Quest's proposed acquisition of LifeLabs, including adverse results from pending or future government investigations, lawsuits or private actions, the competitive environment, the complexity of billing, reimbursement and revenue recognition for clinical laboratory testing, changes in government regulations, changing relationships with customers, payers, suppliers or strategic partners and other factors discussed in Quest's most recent filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K and in any of its subsequently filed Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, including those discussed in the "Business," "Risk Factors," "Cautionary Factors that May Affect Future Results" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of those reports.
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SOURCE Quest Diagnostics
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