MDS to Sell Diagnostics Business to Borealis Infrastructure Management in $1.3B Transaction
Important Milestone in Executing Global Life Sciences Strategy
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MDS Inc. announced it signed an agreement to sell its Canadian laboratory services business, MDS Diagnostic Services, to Borealis Infrastructure Management Inc. in a CAD $1.325 billion transaction. This strategic sale is designed to shift the company's business focus to the life sciences market.
Under this agreement, Borealis Infrastructure Management, an investment entity of Ontario Municipal Employees Retirement System (OMERS), will acquire MDS Diagnostic Services, provider of laboratory services, with annualized revenues of CAD$335 million and over 2,900 employees.
From the total transaction price of CAD$1.325 billion, MDS expects to realize net proceeds of approximately CAD$1.052 billion, after provision for taxes, expenses and amounts attributable to minority interests. A portion of the purchase price may be retained for up to 18 months, contingent on the satisfaction of specific transition obligations of MDS. This transaction is subject to conditions and customary approvals, including regulatory consents and approval from the shareholders of LPBP Inc., the limited partner of the entity that owns the assets used in the Ontario Laboratory Business. The transaction is expected to close by the end of January 2007.
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