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BRAMPTON, Ontario — Loblaw Cos. has agreed to acquire Canadian health care technology company QHR for $170 million. QHR is a leader in the electronic medical records (EMR) market, providing software for health care providers and patients.
Loblaw will buy QHR’s outstanding common shares for $3.10 in cash per share, a 29% premium to the 20-day volume weighted average trading price of the shares on the TSX Venture Exchange and 22% premium to the closing price on August 19. The deal is expected to close in the fourth quarter.
QHR will operate as a distinct business within the Shoppers Drug Mart (SDM) division of Loblaw, and remain headquartered in Kelowna, British Columbia. QHR’s executives will continue in their current roles and be a part of Loblaw’s broader pharmacy and health care group.
“The future of health care is digital, and this strategic investment will make us a better partner to patients and providers,” said Jeff Leger, executive vice president of pharmacy and health care for Loblaw and SDM. “QHR brings complementary talent and technology to our organization, providing opportunities to establish new business partnerships and drive improved care coordination for Canadians.”
QHR supports 7,700 health care providers, representing about 20% of EMR technology use nationwide. It will continue to develop its EMR platform and interoperability, and expand programs for patient care and practice management.
“Our focus, as always, remains great service and the continued delivery of innovative technology that connects health care providers and their patients,” said QHR president and chief executive officer Mike Checkley. “We are excited to join Shoppers Drug Mart, and we see the acquisition as a great vote of confidence for our team, our technology solutions, and the thousands of physicians and business partners that rely on our products daily.”
The deal was unanimously approved by the board of QHR on the recommendation of an independent committee. The purchase will be carried out by way of a statutory plan of arrangement and will require court approval and the approval of at least 66.66% of votes cast by QHR shareholders at a special meeting expected to take place in October.
PenderFund Capital Management Ltd. and Al Hildebrandt, which collectively control approximately 23% of the outstanding common shares, have entered into binding agreements to vote in favor of the transaction.
All holders of outstanding stock options of QHR which have an exercise price below the purchase price of $3.10 per share will be entitled to receive the “in-the-money” value of such stock options, less applicable withholdings.
