Telus announced on Thursday that it has signed an agreement that will see it acquire LifeWorks for $ 2.9 billion, including debt, an agreement that will see it advance employee health and well -being services.
LifeWorks, formerly known as Morneau Shepell, is a human resources firm that assists corporations with personalized employee and family care programs, infertility management, pension management and benefits as well as retirement planning. .
The transaction will add LifeWorks ’employee and family assistance program and benefits management capabilities to Telus Health’s digital technologies.
Telus Health offers virtual care and gives patients access to virtual pharmacy, telehomecare and electronic health records options.
Further extraction
This transaction is financially compelling and strategically beneficial for TelusTelus chief financial officer Doug French said in a statement. It is a natural complement to Telus Health and greatly accelerates our vision for healthcare solutions for employers.
The move comes at a time when digital health services and virtual care have seen huge success during the COVID-19 pandemic, amid lockouts and concerns about the spread of the virus.
Under the agreement, LifeWorks shareholders will have the option to receive $ 33 cash or 1,0642 shares of Telus for each share of LifeWorks they hold, subject to proration.
The amount of cash and the number of shares will be limited so that Telus will pay half of the transaction in cash and the other half in shares.
What analysts say
Scotiabank analyst Jeffrey Fan sees the transaction as strengthening Telus ’place in the digital health industry.
This acquisition will position the company not only as a significant force in the corporate wellness and EAP space [programme d’aide aux employés] in Canada, but will also open up the potential for greater growth and integration around the worldhe said in a note to his clients.
Desjardins analyst Jérôme Dubreuil also considers the acquisition proposal positive for Telus.
The agreement could also significantly increase the size of Telus Health and make the division essential enough to fund new initiatives.he pointed to a note to customers.
While analysts generally accept the deal, some fund managers are not entirely enthusiastic because of market sentiment.
” Premium paid [Telus] in a one-way market, that’s not a good idea. “
The deal requires the support of a two-thirds majority vote of LifeWorks shareholders as well as court and other regulatory approvals.
Companies expect to close the deal in the fourth quarter of 2022.
Telus expects the transaction to help generate annual savings in the range of $ 170 million to $ 200 million over the next three to five years.
The combined companies have business customers in Canada, the United States and more than 160 countries, covering more than 50 million lives worldwide.
In a conference call with analysts, Telus explained that it does not expect much service overlap between the two organizations, whether in Canada or abroad, and it expects the regulatory process to be “smooth”.
LifeWorks stock jumped $ 12.08, or 66.4%, on Thursday to close at $ 30.28 on the Toronto Stock Exchange, while Telus stock fell $ 1.74, or 5.9%, to $ 27.62.
Source: Radio-Canada
