LifeWorks, formerly known as
The transaction will add LifeWorks' employee and family assistance program and benefit administration capabilities to
"This transaction is financially compelling and strategically attractive to Telus, and a natural complement to
The move comes as digital health and virtual care services saw great success during the COVID-19 pandemic amid lockdowns and concerns about spreading the virus.
Under the agreement, LifeWorks shareholders will have the option to receive
The amount of cash and number of shares will be limited so that Telus will pay for half the deal in cash and half in shares.
Scotiabank analyst
"This acquisition will position the company as not only a significant force in the corporate well-being and EAP (employee assistance program) space in
Desjardins analyst
"The deal could also significantly increase Telus Health’s scale and make the unit mostly self-sufficient in terms of funding new initiatives," he said in a note to clients.
Telus expects the transaction to help generate annual savings in the range of
The combined companies have corporate clients across
While analysts are generally positive on the deal, some money managers aren't totally excited about it in this market climate.
"The premium (Telus) is paying in a market that is only going one way is not a good look," said Baskin Wealth Management's chief investment officer
The deal requires support by a two-thirds majority vote by LifeWorks shareholders as well as court and other regulatory approvals.
The companies hope to close the deal in the fourth quarter of 2022.
Telus said on the conference call with analysts that it does not anticipate much overlap on services between the two organizations both in
LifeWorks shares closed at
News of the deal sent LifeWorks stock up nearly 69 per cent in early trading Thursday.
This report by
Companies in this story: (TSX:T, TSX:LWRK)
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