Dive Brief:
- Quest Diagnostics has struck a deal to buy the Canadian laboratory testing business Lifelabs for approximately 1.35 billion Canadian dollars (about $985 million), the company said Wednesday.
- The takeover will give Quest control of a business that employs more than 6,500 people and is expected to generate annual sales of around $710 million. Quest reportedly faced competition from Andlauer Healthcare to acquire Lifelabs.
- Buying the company opens a new front in Quest’s rivalry with Labcorp, which acquired Lifelabs’ main Canadian competitor Dynacare in 2002, and marks its third takeover in as many months. Quest purchased Lifelabs from OMERS, a Canadian pension fund with over 1,000 participating employers.
Dive Insight:
Quest’s business development team has been active in recent months, disclosing a deal to buy PathAI’s diagnostic laboratory in May and following up with an agreement to acquire assets from Allina Health in June.
Lifelabs is already part of the Quest-led Global Diagnostic Network, which connects 12 leading diagnostic testing labs globally, and has a reference relationship with its buyer. Quest provides access to select advanced diagnostic tests through the relationship.
When the deal closes, which Quest expects to happen this year, Lifelabs will keep its brand, Canadian headquarters and management. The companies said Quest will provide Lifelabs with “new expertise, innovations and resources.”
Quest outlined plans to improve Lifelabs’ online scheduling, accelerate patient service center processing and advance efforts to enhance data security. Lifelabs suffered a cyberattack in 2019 that resulted in unauthorized access to computer systems that contained customer information including lab test results. The company settled a class action lawsuit on the matter.
The focus on online scheduling and patient service center processing is in line with Quest’s approach to acquired assets. Quest CEO James Davis said on an earnings call in April that the M&A strategy includes “driving operational improvements across the business with the strategic deployment of automation and AI to improve quality, service, efficiency and the workforce experience.”
