Telus Health buys LifeWorks in $2.3B deal, analysts upbeat

Telus Corp. announced Thursday it is purchasing digital health company LifeWorks Inc. for approximately $2.3 billion. That works out to $33 per share. The acquisition will be merged into the telecom’s health division. “Customers will benefit from our team’s steadfast focus on providing exceptional customer experiences over our world-leading broadband networks, our consolidated engineering talent that will incorporate best-in-class data platform technologies to positively impact health outcomes for employees and their families, and our significantly expanded economies of scope and scale,” Telus CEO Darren Entwistle stated in a news release. Stephen Liptrap, president and CEO of LifeWorks, was similarly enthusiastic. “Our two organizations also have shared values and are leading, purpose-driven organizations committed to improving the lives of people around the world,” he said in the statement. “The fit for the LifeWorks team couldn’t be better.” “This transaction is financially compelling and strategically attractive to Telus, and a natural complement to Telus Health, significantly accelerating our vision of advancing employer-based healthcare, increasing access to high quality, proactive healthcare and mental wellness for employees,” executive vice-president and CFO of Telus Doug French stated in the release. LifeWorks shareholders can opt to receive the $33 per share or they can redeem their LifeWorks shares for 1.06 shares of Telus. The special shareholders meeting is scheduled for August and the deal is expected to close by the fourth quarter of 2022. Financial analysts applauded the move. Adam Shine of the National Bank noted, “While we weren't necessarily anticipating the purchase of LifeWorks, Telus has made clear its intentions of boosting the scale of Telus Health as well as Telus Agriculture through and ultimately following a monetization path. The purchase of LifeWorks would significantly enhance the scale and scope of Telus Health.” Drew McReynolds at RBC Capital Markets gave the deal a “neutral” sentiment in a note released Thursday. “We believe this acquisition is consistent with the growth strategy and playbook that has been articulated by Telus Health and Telus management over the past few years,” he wrote. Revenues should increase by $1 billion and coverage will more than double from 22 million people to more than 50 million, according to McReynolds. The transaction will also increase Telus Health’s international reach, he noted. “In addition, we believe this acquisition firmly puts Telus Health on a path to an eventual crystallization reflecting its strategic and financial benefits,” he said. Telus Health has been expanding its operations over the years, particularly at COVID-19 spread. Four years ago it launched a health app for infants and the year before that supported an e-prescription platform. –Reporting by Paul Park at ppark@thewirereport.ca and editing by Jenna Cocullo at jcocullo@thewirereport.ca.

Telus Health buys LifeWorks in $2.3B deal, analysts upbeat

News | June 16, 2022

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Telus Health buys LifeWorks in $2.3B deal, analysts upbeat

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