Diagnostic information services provider Quest Diagnostics (NYSE: DGX) announced on Wednesday that it has signed a definitive agreement to acquire LifeLabs, provider of community laboratory tests, from OMERS for approximately CAD1.35bn (USD985m), including net debt. The acquisition aims to enhance diagnostic services for Canadians.

Jim Davis, Chairman, CEO, and President of Quest Diagnostics, highlighted the company's commitment to accelerating LifeLabs' growth and improving healthcare services. LifeLabs will retain its brand, Canadian headquarters, and management team, while benefiting from Quest's expertise and innovations. This includes enhanced online appointment scheduling, faster patient service, and improved data security measures.

LifeLabs has over 6,500 employees and will continue to operate under its existing brand. Quest has supported Canadian laboratories, hospitals, and academic centres for over two decades, including during the COVID-19 pandemic.

The transaction is expected to generate CAD970m (USD710m) in annual revenues. Quest plans to fund the acquisition through cash on hand and debt. The acquisition is anticipated to be slightly dilutive to GAAP earnings per share but accretive to adjusted EPS within the first 12 months post-closing.

Subject to customary closing conditions and regulatory approvals, the transaction is set to close by the end of the year.

McCarthy Tétrault LLP served as legal advisor to Quest Diagnostics, while Blake, Cassels & Graydon LLP, Evercore and CIBC Capital Markets advised OMERS, a jointly sponsored, defined benefit pension plan.