One of the biggest pension funds in Canada is looking to make some blood money… and by that we mean they’re looking to sell the place where you probably get your bloodwork done.
Driving the news: OMERS has been peddling LifeLabs — Canada’s largest private medical lab company — since last year, per The Globe and Mail. The massive Ontario pension fund reportedly has two interested suitors, though it has not confirmed anything.
- Behind door #1 is Vaughan-based Andlauer Healthcare Group (AHG), a medical logistics company run by the new Ottawa Senators owner Michael Andlauer.
- Behind door #2 is U.S. company Quest Diagnostics, a medical lab company that is much bigger than AHG and has used acquisitions to fuel expansion.
Why it’s happening: OMERS bought LifeLabs (then-called MDS) back in 2007 for $1.33 billion and has since built up the company by pouring over $2.5 billion into it. Now, the company is looking to get a sizeable return on its investment, asking for a “premium valuation.”
- This is reportedly not the first time OMERS tried to sell LifeLabs. Besides cash, a motivating factor could be to distance itself from the company’s 2019 data leak.
Why it matters: If OMERS sells LifeLabs to a U.S. bidder, the Canadian private medical lab industry — which is essentially a duopoly dominated by LifeLabs and Dynacare, owned by U.S. medical testing giant Labcorp — will be effectively non-Canadian owned.—QH