Morneau Shepell to acquire U.K.’s LifeWorks for $426M

Canadian employee benefits company Morneau Shepell Inc. has agreed to buy LifeWorks Corp. Ltd. for about $426 million to help expand in the U.S., U.K., Australia and Canada.

Morneau Shepell will issue $210 million in subscription receipts to help finance the transaction and issue another $31 million in stock to LifeWorks executives, the companies said.

“This is a tremendous opportunity to grow our U.S. and global footprint, while building on our technology footprint to create integrated user experiences,” said Stephen Liptrap, chief executive officer of Morneau Shepell.

LifeWorks, which is based in the U.K., serves 4,200 employers across 57 industries, providing employee assistance, wellness, recognition and incentive programs. It was formed in 2016 as a joint venture between Work Angel Technology Ltd. and Ceridian HCM Holding Inc.

Under the terms of the deal, TD Securities Inc. and National Bank Financial Inc. have agreed to issue, on a bought deal basis, 7.91 million subscriptions receipts at $26.55 a piece with the option for the underwriters to acquire an additional 791,000, the companies said. The receipts are exercisable at any time, in whole or in part, up to 30 days after the closing of the offering. The offering is expected to close on July 27.

Morneau Shepell’s shares were halted Monday ahead of the announcement. They closed down 0.65 per cent to $27.48 in Toronto trading on Tuesday.

The stock has risen 32 per cent over the past 12 months to a record compared with about 9 per cent for the benchmark S&P/TSX Composite Index.