Loblaw Companies Ltd. is planning another acquisition in the health-care industry, offering $170 million to buy a B.C. based company that provides secure medical records technology.
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 percent over the Friday closing price of QHR’s shares.
Loblaw says QHR is a “natural complement” to its Shoppers Drug Mart business, which operates Canada’s largest retail network of pharmacies and keep its headquarters in Kelowna.
QHR currently supports 7,700 health-care providers with a suite of secure medical records technology. Its board of directors is supporting the Loblaw takeover bid but the deal requires approval from at least two-thirds of the votes cast by QHR shareholders at a special meeting to be held in October.
Cantor Fitzgerald analyst Ralph Garcea in a note said that the Canadian business sector for electronic medical records is evaluated at $350 million every year. As of the end of March of this current 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 programming initially created 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 percent, to end at $71.81 on the TSX.
“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.