Loblaw offers $170M bid for medical records firm QHR
Loblaw Companies Ltd. is buying QHR Corp., an electronic medical records company based in Kelowna, B.C., in a deal worth about $170 million.
Loblaw will pay $3.10 in cash to buy all of QHR's outstanding shares. That put the takeover price at a premium of 22 per cent over the Friday closing price of QHR's shares.
Loblaw called QHR a "natural complement", adding that the company is expected to remain a distinct unit within Shoppers Drug Mart and keep its headquarters in Kelowna.
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"The future of healthcare is digital and this strategic investment will make us a better partner to patients and providers," said Jeff Leger, the executive vice president of pharmacy and healthcare for Loblaw and Shoppers Drug Mart.
QHR supports about 7,700 healthcare providers, representing about 20 per cent of the electronic medical record technology in use across the country, the companies said in a release.
A shareholder vote on the deal — which requires two-thirds approval — is expected at a QHR special shareholder meeting in October.
The deal isn't expected to be material to Loblaw's results, said Irene Nattel, an analyst at RBC Dominion Securities.
Cantor Fitzgerald analyst Ralph Garcea in a note that the Canadian market for electronic medical records is estimated at $350 million per year. As of the end of March of this year, QHR was ranked third in terms of market share in in electronic medical records in Ontario, behind Telus Health and OSCAR, which is an open-source software originally developed at McMaster University.
Shares of QHR rose 56 cents to reach $3.10 on the TSX Venture Exchange. Loblaw shares gained 71 cents, or one per cent, to end at $71.81 on the TSX.
with files from The Canadian Press