LifeWorks Acquisition: Key Details, Impact, and What Comes Next

TELUS Corporation has successfully acquired LifeWorks Inc. for C$2.3 billion, marking a significant milestone in the digital health and wellness industry. This strategic move positions TELUS Health as a global leader, now supporting corporate clients in over 160 countries and covering more than 50 million lives. The acquisition aims to enhance TELUS Health's capabilities, offering comprehensive digital-first health solutions to employers worldwide.

What Is LifeWorks?

Founded in 1966, LifeWorks offers a range of comprehensive wellbeing solutions for employers, including mental health support, physical health services, absence management, consulting, training, and benefits administration. Its unique selling points include end-to-end care covering mental, physical, and financial health, accessible services across Canada, and customizable packages tailored to organizational needs. LifeWorks emphasizes a preventative approach to healthcare, providing evidence-based solutions and scalable services to support both employees and HR teams.

Who Acquired LifeWorks?

TELUS is a prominent telecommunications company in Canada, offering a diverse range of services including mobile phone plans, high-speed internet, TV and entertainment packages, home security solutions, and health services. Known for its high-quality network, TELUS provides products like 5G+ Unlimited plans, PureFibre Internet, and Optik TV. The company holds a leading market position, emphasizing social impact and community involvement through various initiatives and competitive promotions.

When Was LifeWorks Acquired?

TELUS completed its acquisition of LifeWorks on September 1, 2022. This strategic move comes at a time when the demand for digital health and wellness solutions is surging, driven by the post-pandemic focus on mental health and employee well-being. The acquisition aligns with industry trends emphasizing comprehensive, digital-first healthcare services, positioning TELUS Health to meet the evolving needs of employers and employees globally.

Why Was LifeWorks Acquired?

Market Expansion: The acquisition of LifeWorks significantly broadens TELUS Health's global reach, now covering corporate clients in over 160 countries and more than 50 million lives worldwide. This strategic move allows TELUS to extend its offerings beyond Canada, leveraging LifeWorks' international relationships and TELUS International's client base in 28 countries.

Technology Integration: TELUS plans to integrate its strong digital and data analytics capabilities with LifeWorks' digital and in-person wellness solutions. This combination aims to enhance health outcomes and provide comprehensive care. TELUS International's expertise in digital transformation will further bolster LifeWorks' operations, creating a robust digital-first health and wellness platform.

Competitive Advantage: The merger positions TELUS Health as a global leader in digital health and wellness, offering unmatched primary and preventative healthcare solutions. The combined strengths of TELUS and LifeWorks create a compelling offering for employers, enhancing talent acquisition and retention while improving business performance. Significant cross-selling synergies and TELUS' solid financial backing will drive continued innovation and market share growth.

Acquisition Terms

• Acquisition Price: Approximately C$2.3 billion, including the assumption of net debt of approximately C$600 million.
• Payment Method: The transaction was funded with a combination of cash and TELUS common shares. Specifically, approximately C$1.033 billion was paid in cash, and approximately 33.3 million TELUS common shares were issued.
• Key Conditions or Agreements:
  • The transaction was completed by way of a plan of arrangement.
  • LifeWorks common shareholders had the right to elect to receive either C$33.00 in cash per share, 1.06420 TELUS common shares per share, or a combination of C$16.50 in cash and 0.53210 TELUS common shares per share.
  • The aggregate consideration paid to LifeWorks common shareholders consisted of 50% in cash and 50% in TELUS common shares, subject to proration.
  • The transaction required approval from LifeWorks shareholders, court approval, and other regulatory approvals.
  • The agreement included a non-solicitation covenant and a right for TELUS to match any superior proposal.
  • Termination fees were specified: C$94 million payable by LifeWorks under certain circumstances and C$140 million payable by TELUS under other specified circumstances.
  • LifeWorks' common shares were delisted from the Toronto Stock Exchange, and LifeWorks applied to cease being a reporting issuer under Canadian securities laws.

Impact on LifeWorks

The acquisition of LifeWorks by TELUS has led to significant changes in operations and management. Michael Dingle, TELUS Health’s Chief Operating Officer, is overseeing the transition and integration of LifeWorks into the TELUS Health family. LifeWorks now operates as a wholly owned subsidiary of TELUS, continuing its growth strategy with enhanced digital health technologies. The integration aims to leverage TELUS' digital and data analytics capabilities to improve health outcomes and support the well-being of over 50 million individuals globally.

Product offerings and services have also seen a transformation. The combined entity now provides a comprehensive suite of digital-first health and wellness solutions, including mental health support, virtual care, and benefits administration. This merger has created a global leader in employer-focused healthcare, offering high-quality, proactive healthcare and mental wellness services. Employee reactions have been positive, with both TELUS and LifeWorks executives expressing excitement about the opportunities ahead. Customers are expected to benefit from improved employee wellness, enhanced talent acquisition and retention, and better business performance.

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