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Telus buys former Finance Minister's money losing company for billions
June 20, 2022
8:44 pm
AllanB
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Bill Morneau changed the name of his company from Morneau Shepell to LifeWorks and sold it to Telus for $2.9 billion including debt. It makes little profit.

Last 5yrs in millions (yahoo): Net Income -20,205 -24,085 55,924 18,968 21,797

Premium paid for the stock 80%

Seems fishy

June 21, 2022
8:04 am
COIN
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Was any government money involved? It does sound like a huge premium and Telus is a regulated entity.

June 21, 2022
8:18 am
blake
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One of their clients is the Sears employee pension plan.

Morneau Shepell
Pension Plan Administrator
895 Don Mills Road, Tower One, Suite 700
Toronto, ON M3C 1W3
Toll-free number: 1-888-841-8956
Email: searspension@morneaushepell.com

June 21, 2022
6:12 pm
Norman1
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The transaction is between TELUS Corporation and LifeWorks Inc.

TELUS Corporation is not regulated by the CRTC. Only its subsidiary TELUS Communications Inc. is.

It looks like LifeWorks Inc. will be paired or combined with their TELUS Health subsidiary.

June 21, 2022
6:18 pm
COIN
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Norman1 said
The transaction is between TELUS Corporation and LifeWorks Inc.

TELUS Corporation is not regulated by the CRTC. Only its subsidiary TELUS Communications Inc. is.  

So, no taxpayer money involved. That's good.

Does Telus have the same or similar corporate structure as BCE (only Bell is regulated by the CRTC?)?

June 21, 2022
6:25 pm
Norman1
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COIN said

Does Telus have the same or similar corporate structure as BCE (only Bell is regulated by the CRTC?)?

Yes, TELUS does to also keep the CRTC out of its non-telecommunications businesses.

June 26, 2022
1:07 pm
Doug
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AllanB said
Bill Morneau changed the name of his company from Morneau Shepell to LifeWorks and sold it to Telus for $2.9 billion including debt. It makes little profit.

Last 5yrs in millions (yahoo): Net Income -20,205 -24,085 55,924 18,968 21,797

Premium paid for the stock 80%

Seems fishy  

This is quite a misleading, arguably flamebaiting, thread, as Morneau Shepell is most definitely not a "money-losing company," as you suggest. Looking at the 2021 annual report, the company reported significantly growing revenues (sales), strong organic growth rates, growing digital revenues, and growing adjusted EBITDA. The net losses you cite in recent years seem to have been non-cash charges to the income statement as a result of accelerated I.T. systems migrations to a streamlined digital first platform. In short, a paper loss only. The important measures here are cash flow, which is positive and growing, and EBITDA/adjusted EBITDA.

Moreover, unless you're a recent buyer of LifeWorks stock at ~$36.00 (relative to the current price of $34.00), you have done well.

I expect Telus to be able to take advantage of significant cost synergies and overall this acquisition to be significantly accretive to the profit its Telus Health division generates. Telus will now be the largest EAP services provider in Canada, the largest administrator/payment processor of employee health and dental payment claims, and one of the largest pharmacy benefits managers in Canada now. That's a pretty compelling merger argument.

Personally, I'm a bit disappointed, as I would've preferred to have waited for a pullback in LifeWorks' stock price, as I like the story and would've liked to have owned it as an independent company.

Cheers,
Doug

June 26, 2022
1:10 pm
Doug
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COIN said

So, no taxpayer money involved. That's good.

Does Telus have the same or similar corporate structure as BCE (only Bell is regulated by the CRTC?)?  

Yes, and to add to what Norman1 said above, barring any objections from the Competition Bureau or shareholders, this business combination is not subject to any other regulatory approval.

Cheers,
Doug

June 26, 2022
1:13 pm
Doug
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blake said
One of their clients is the Sears employee pension plan.

Morneau Shepell
Pension Plan Administrator
895 Don Mills Road, Tower One, Suite 700
Toronto, ON M3C 1W3
Toll-free number: 1-888-841-8956
Email: searspension@morneaushepell.com  

And the Nortel Networks and Wabush Mines/Wabush Lake Railway Company pension plans:

https://www.pensionwindups.morneaushepell.com/_private/select_plan.asp?DURL=/en/plan_info/plan_info.asp#listing

This is just from their division that is engaged to provide administration and consultancy services around pension plans being wound up or that are otherwise not continuing. They also provide plan agent administration and consultancy services to continuing pension plans and plan managers.

Cheers,
Doug

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