Two of Canada's largest medical lab operators will be combined under a $1.22 billion Canadian friendly takeover deal backed by one of Ontario's largest public sector pension funds.
Assuming the deal is approved, LifeLabs Medical Laboratory Services will pay $10.75 per share cash and assume $255 million of debt to acquire all of CML HealthCare Inc. of Mississauga, Ontario.
"I'm very pleased to announce that our two laboratory diagnostic companies are coming together in Ontario to serve patients and their health providers," said Sue Paish, President and CEO of LifeLabs.
"Coming together, we can be even stronger partners with government and health care providers in the planning and delivery of high quality and accessible diagnostic services for Canadians."
LifeLabs serves about 10 million patients and nearly 20,000 physicians in Canada, mainly in Ontario and British Columbia.
CML HealthCare Inc. has 112 client care centers in Ontario. It also has 82 imaging centers in Ontario and British Columbia but has been divesting its imaging business to focus more on its medical diagnostic labs.
"Our two organizations care about patients and helping physicians identify the right course of action for better health care outcomes," said Thomas Wellner, President and CEO of CML HealthCare.
"So, in bringing the two companies together, we are fully aligned in our commitment to quality and continuous improvement in patient services in Ontario going forward."
The deal is being supported by the boards of CML, LifeLabs and the Ontario Municipal Employees Retirement System, or OMERS, which owns LifeLabs through its Borealis Infrastructure arm.
CML shareholders, who would receive one more dividend payment before the deal closes, will be asked to approve the deal at a special meeting on Sept. 3. The transaction will also require regulatory and court approvals.