Bulletin: Telus Corp.?s C$2.9 Billion Lifeworks Inc. Acquisition Will Delay Deleveraging

TORONTO (S&P Global Ratings) June 16, 2022--S&P Global Ratings today said it views Telus Corp.'s (BBB+/Negative/A-2) announcement today that it is acquiring Lifeworks Inc. for approximately C$2.9 billion as unlikely to affect its rating on Telus. Lifeworks is a technology-enabled company that provides human resource services to its clients. Although the acquisition will expand Telus Health capabilities, we expect it will also add about 0.20x of additional debt leverage, keeping the 2022 pro forma adjusted debt-to-EBITDA ratio above our downside threshold of 3.25x. The acquisition, which will likely close fourth-quarter 2022, is expected to be funded through 60% debt and 40% equity. Assuming modest growth in 2021 Lifeworks' operations, we forecast 2022 pro forma leverage to be approximately 3.4x-3.5x but

...June 16, 2022 TORONTO (S&P Global Ratings) June 16, 2022--S&P Global Ratings today said it views Telus Corp.'s (###+/Negative/A-2) announcement today that it is acquiring Lifeworks Inc. for approximately C$2.9 billion as unlikely to affect its rating on Telus. Lifeworks is a technology-enabled company that provides human resource services to its clients. Although the acquisition will expand Telus Health capabilities, we expect it will also add about 0.20x of additional debt leverage, keeping the 2022 pro forma adjusted debt-to-EBITDA ratio above our downside threshold of 3.25x. The acquisition, which will likely close fourth-quarter 2022, is expected to be funded through 60% debt and 40% equity. Assuming modest growth in 2021 Lifeworks' operations, we forecast 2022 pro forma leverage to be approximately 3.4x-3.5x but improving to 3.2x-3.3x in 2023. With this deal, we expect a delay in ratings stability, reflecting a slowdown in deleveraging following the integration of the acquisition and...

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