Quest Diagnostics to Acquire Lifelabs in a $985M Deal

Quest Diagnostics has announced its acquisition of the Canadian laboratory testing company LifeLabs for approximately 1.35 billion Canadian dollars (about $985 million), marking a significant expansion in its rivalry with Labcorp. This move represents Quest’s third takeover in the last three months. The acquisition of LifeLabs, a company employing over 6,500 people and expected to generate annual sales of around $710 million, follows reported competition from Andlauer Healthcare for the deal.

This acquisition opens a new competitive front with Labcorp, which acquired LifeLabs’ main Canadian competitor Dynacare in 2002. Quest acquired LifeLabs from OMERS, a Canadian pension fund with over 1,000 participating firms.

Quest has been notably active in business development recently. In May, Quest disclosed a deal to buy PathAI’s diagnostic laboratory, followed by an agreement to acquire assets from Allina Health in June.

LifeLabs is already a member of the Quest-led Global Diagnostic Network, which unites 12 prominent diagnostic testing labs worldwide and has a reference connection with its buyer.

Through this relationship, Quest provides access to select advanced diagnostic tests.

Upon closing the deal, expected later this year, LifeLabs will retain its brand, Canadian headquarters, and management. Quest has committed to bringing “new expertise, innovations, and resources” to LifeLabs, including plans to improve online scheduling, accelerate patient service center processing, and advance data security efforts.

LifeLabs experienced a cyberattack in 2019 that led to unauthorized access to customer information, including lab test results, and subsequently settled a class action lawsuit related to the incident. Quest’s focus on online scheduling and patient service center processing aligns with its approach to acquired assets. In an April earnings call, Quest CEO James Davis stated that the M&A strategy involves “driving operational improvements across the business with the strategic deployment of automation and AI to improve quality, service, efficiency, and the workforce experience.”