Canadian telecommunications company Telus Corp. plans to acquire digital health provider LifeWorks Inc. (formerly Morneau Shepell) for about $2.3 billion, branching further into healthcare as it pursues a diversification strategy.
Digital and telehealth services have become an important dimension of healthcare after the pandemic forced many patient interactions outside hospitals and clinics. According to a statement from the two companies, the acquisition will enable the companies to form a global provider of primary and preventive health and wellness digital services.
Telus will also assume LifeWorks’ existing debt, bringing the total transaction value to $2.9 billion. The Vancouver-based company will pay $33 for each LifeWorks share and is offering a cash or stock option or a mix of the two. The offer is a premium of about 80 percent to LifeWorks’ closing share price of $18.20 on Wednesday. Telus shares closed at $29.36 on Wednesday.
Telus followed a different strategy than major Canadian telecom rivals BCE Inc. and Rogers Communications Inc., avoiding ownership of media assets to expand into digital technology and services for businesses and individuals.
“This transaction is financially attractive and strategically attractive for Telus, and a natural complement to Telus Health, significantly accelerating our vision of advancing employer-based healthcare by increasing access to proactive, high-quality healthcare and well-being. -being mental for employees,” said the CFO. said Officer Doug French in a statement.
The deal requires the support of two-thirds of LifeWorks shareholders, as well as court and other regulatory approvals. The companies expect to close the deal in the fourth quarter of 2022.
If successful, approximately 7,000 employees and 25,000 LifeWork customers will transfer to Telus.
Telus Health has been at the center of controversy in recent years after a data breach at two of its medical service providers and two reports from Alberta’s privacy commissioner found the company ignored the province’s health information privacy laws. when it launched its health app in 2020.
Telus said at the time that it was meeting other global privacy standards.
“If I were working for a company that uses LifeWorks, I would certainly be asking my boss about what is happening with the information LifeWorks holds and whether it is now owned by Telus,” said Hugh Gunz, professor emeritus of organizational behavior and HR Management at the Institute of Management and Innovation at the University of Toronto Mississauga.
The Toronto-based company says the types of information it collects depends on which products and services a sponsoring organization selects for its employees, the products and services employees choose to participate in, and the information users choose to provide.
Any information is potentially sensitive, Gunz said, and employees must be confident that their data is kept secure.
“Telus, if they are responsible, will contact each of the LifeWorks customers to say this is what happened and this is how (the acquisition) might affect you. If Telus is not doing this, I would be very surprised and worried,” he said.
Neither Telus nor LifeWorks responded to questions regarding the transfer of customer information to Telus.
“What’s happened in the last few years is that people have realized that a lot of companies hold a lot of very sensitive information about people, and they’re not necessarily protecting it properly,” Gunz said.
However, Ontario’s former three-term privacy commissioner Ann Cavoukian emphasized that while it’s understandable that some customers are concerned given the size of the acquisition and past privacy breaches, Telus has one of stringent privacy policies of all telecoms and digital health companies. providers.
“Telus has consistently demonstrated a very strong commitment to privacy,” said Cavoukian, noting that the company has been certified for privacy by design, a set of seven principles that ensure privacy is proactively built into the design and operation of IT systems. , network infrastructure and business practices. The structure was designed by Cavoukian in the 1990s.
Cavoukian said the privacy issues related to Telus Health have now been resolved. Telus Health does not allow any type of analysis of patient information without the customer’s consent, she said.
“If I were a LifeWorks patient, I would be delighted that Telus has now taken responsibility because they have an incredible track record and follow privacy by design, which is the strongest form of privacy protection,” said Cavoukian.
With archives from Bloomberg and The Canadian Press
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