LifeWorks Inc. (TSX: LWRK, “LifeWorks” or the “Company”), today announced that it has entered into a binding agreement (the “Arrangement Agreement”) with TELUS Corporation (TSX: T, NYSE: TU “TELUS”) under which TELUS has agreed to acquire all of the issued and outstanding common shares of LifeWorks (the “Transaction”). Pursuant to the Transaction, LifeWorks shareholders will have the option to elect to receive:
- C$33.00 per LifeWorks share in cash (“Cash Consideration”); or
- 1.0642 TELUS shares per LifeWorks share, representing share consideration of C$33.00 based on the 20-day volume weighted average price of TELUS shares on the Toronto Stock Exchange (“TSX”) ending on June 14, 2022 (“Share Consideration”); or
- C$16.50 in cash plus 0.5321 TELUS shares per LifeWorks share, representing 50% Cash Consideration and 50% Share Consideration (“Combination Consideration”);
- Elections to receive the Cash Consideration or the Share Consideration will be subject to proration to ensure aggregate Cash Consideration and Share Consideration each represent 50% of the total transaction consideration.
LifeWorks shareholders who do not elect Cash Consideration or Share Consideration will receive the Combination Consideration.
The Transaction represents a premium of 80% and 89% to the closing price and 20-day VWAP, respectively, of LifeWorks’ shares on the TSX as at June 14, 2022. The total transaction value, including net debt, is approximately C$2.9 billion.
Stephen Liptrap, President and CEO, LifeWorks, stated, “The Transaction represents an exciting new chapter for LifeWorks. The combination of TELUS Health and LifeWorks represents an unmatched opportunity to create a leader in employer-focused primary and preventative digital healthcare and wellness solutions on a global basis. Together, we will accelerate our shared vision of empowering individuals to live their healthiest lives by unifying the continuum of care through digital-first innovations, as well as our unmatched in-person care. Our two organizations also have shared values and are leading, purpose-driven organizations committed to improving the lives of people around the world. The fit for the LifeWorks team couldn’t be better.”
“We look forward to welcoming LifeWorks employees and customers into our TELUS Health family,” said Darren Entwistle, President and CEO of TELUS. “Today’s announcement will enable us to combine the respective skills and capabilities of LifeWorks and TELUS Health, creating a globally leading, end-to-end, digital-first employee preventative and mental health and wellness platform covering more than 50 million lives. Customers will benefit from our team’s steadfast focus on providing exceptional customer experiences over our world-leading broadband networks, our consolidated engineering talent that will incorporate best-in-class data platform technologies to positively impact health outcomes for employees and their families, and our significantly expanded economies of scope and scale. This includes complementing LifeWorks’ international relationships with TELUS International’s proven expertise in digital transformation and client service excellence, as well as their expansive client base and delivery teams spanning 28 countries, to extend our offerings to customers well beyond Canada. Indeed, at TELUS Health, our mission is predicated on the belief that we can build a healthier future for people around the world by leveraging the power of technology, in combination with our caring culture, to promote collaboration and efficiency, and create better health experiences across the entire health ecosystem. This is particularly crucial in the post-pandemic era, where employers and their employees are struggling with mental health and well-being concerns. In this regard, our combined organizations, guided by a shared set of values, will provide employers with simple, convenient and effective, data-driven primary and preventive care solutions for employees and their families to proactively manage their health and wellness, including their mental health, so that they can lead their healthiest and most productive professional and personal lives.”
LifeWorks’ Board of Directors (the “Board”) unanimously approved the Arrangement Agreement following a unanimous recommendation of a special committee of independent directors (the “Special Committee”) of the Board. Both the Special Committee and the Board determined that the Transaction is in the best interests of the Company and is fair to the shareholders of LifeWorks.
Robert Courteau, Chair of the Board, commented, “We have, with the assistance of our financial and legal advisors, conducted a thorough evaluation of TELUS’ proposal along with a comprehensive process focused on maximizing value for LifeWorks’ shareholders, while taking into consideration the interest of all stakeholders. We are pleased to announce this Transaction, which is an excellent outcome for LifeWorks’ shareholders, and for our clients, partners, employees and other stakeholders.”
LifeWorks’ financial advisors, BMO Capital Markets and Goldman Sachs Canada Inc., have each provided an opinion to the Board and the Special Committee that, as of the date thereof and subject to the various assumptions, limitations and qualifications set forth therein, the consideration to be received by shareholders of LifeWorks pursuant to the Transaction is fair, from a financial point of view, to shareholders of LifeWorks (other than TELUS and its affiliates). The full text of each such fairness opinion sets forth the assumptions made, procedures followed, matters considered, qualifications and limitations on the review undertaken in connection with each such opinion. The opinions of BMO Capital Markets and Goldman Sachs Canada Inc. are not recommendations as to whether or not any shareholder of LifeWorks should vote or make any election with respect to the Transaction or any other matter.
Details of the Transaction
The Transaction, which is not subject to a financing condition, will be implemented by way of a court-approved plan of arrangement under the Business Corporations Act (Ontario) and will require the approval of 66 2/3% of the votes cast by LifeWorks shareholders at the Special Meeting. In addition to approval by LifeWorks shareholders, the Transaction is also subject to the receipt of court approval, regulatory approvals including competition clearances, and other customary closing conditions for transactions of this nature.
The Arrangement Agreement provides for customary deal-protection provisions, including a non-solicitation covenant on the part of LifeWorks and a right for TELUS to match any Superior Proposal (as defined in the Arrangement Agreement). The Arrangement Agreement provides for a termination fee of C$94 million, payable by LifeWorks under specified circumstances, as well as a reverse termination fee of C$140 million, payable by TELUS under other specified circumstances.
The directors and senior officers of LifeWorks, owning in aggregate approximately 0.3% of the common shares of LifeWorks, have entered into customary support and voting agreements to vote in favour of the Transaction.
LifeWorks expects to continue to pay monthly dividends in the ordinary course, consistent with past practice, through closing of the Transaction.
Further details regarding the terms of the Transaction are set out in the Arrangement Agreement, which will be publicly filed by LifeWorks under its profile at www.sedar.com. Additional information regarding the terms of the Arrangement Agreement, the background to the Transaction, the reasons for the recommendations made by the Special Committee and the LifeWorks Board and how LifeWorks shareholders can participate in and vote at the Special Meeting will be provided in the management information circular for the Special Meeting, which will also be filed at www.sedar.com. Shareholders are urged to read these and other relevant materials when they become available.