BRAMPTON, Ont. — Loblaw Companies Ltd. announced a deal Monday to buy Lifemark Health Group for $845 million in cash.
Lifemark, owned by Audax Private Equity, provides physiotherapy, massage therapy, occupational therapy, chiropractic, mental health and other rehabilitation services.
It has more than 300 clinics across Canada.
Loblaw, which owns Shoppers Drug Mart, said the deal helps grow its business as a health-care service provider.
“For Canadians who want to get well and stay well, pharmacy and physical therapy services go hand in hand. Shoppers and Lifemark together make the continuum of care easier for patients,” Shoppers Drug Mart president Jeff Leger said in a statement.
The company said the deal will create a network of thousands of individual health-care professionals, with complementary expertise.
Lifemark chief executive Peter Stymiest called Shoppers Drug Mart a well-trusted, iconic Canadian brand.
“By joining Shoppers, Lifemark will continue to grow as a national health and wellness network, reaching more Canadians who need access to care and advancing our shared vision to enrich the health of Canadians,” Stymiest said in statement.
The deal is subject to regulatory approvals and other customary closing conditions.
It is expected to close in the second quarter of this year.
Chris Li of Desjardins Capital Markets said Lifemark is a leader in the fragmented $11-billion physical therapy industry but with only about five per cent market share.
Lifemark is on Loblaw’s digital PC Health booking app and adds to Shoppers’ growing role as a healthcare service provider, with a network of health and wellness solutions, he wrote in a report.
“Physical therapy services are a continuum of primary healthcare services and a natural extension to Loblaw’s Connected Healthcare strategy into adjacent healthcare verticals.”
He estimate’s that Lifemark’s annual revenues at about $450 million per year but with higher margin’s than Loblaw.