U.S.-based giant Quest Diagnostics has agreed to purchase Canada’s LifeLabs for $1.35 billion, including net debt, from OMERS.

Toronto-based LifeLabs ranks as Canada’s largest medical-testing company. OMERS is the Ontario Municipal Employees Retirement System, which ranks among the country’s largest pension fund managers.

LifeLabs was founded in Vancouver by late pathologist and entrepreneur Dr. Donald Rix. The company has 382 collection centres and 16 laboratories in Ontario, B.C., and Saskatchewan. OMERS has owned the company since 2007.

Secaucus, N.J.-based Quest, a Fortune 500 company, ranks among the world’s largest diagnostics companies and has 50,000 employees.

Quest said the acquisition is slated to close by year-end 2024, subject to usual closing conditions and regulatory approvals. Given its large size and cross-border aspects, the deal may face scrutiny from Canada’s Competition Bureau. If all goes according to plan, LifeLabs will retain its brand, Canadian headquarters, and management after the acquisition is closed. 

The deal comes after the Globe and Mail reported in January that OMERS had put LifeLabs up for sale and Quest was among the potential purchasers. Vaughan, Ont-based Andlauer Healthcare Group was also a leading potential buyer, the Globe reported while citing unidentified sources.

Andlauer Healthcare is headed by founder Michael Andlauer, who is also the majority owner of the National Hockey League’s Ottawa Senators. Quest’s largest shareholders include Vanguard Group and BlackRock.

According to the Globe, OMERS had sought a premium valuation that would exceed the $2.5 billion that the pension plan had invested in LifeLabs.

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