You don’t change a recipe that works. Telus has invested, in recent years, in at least three industries where the emergence of digital technology promised an in-depth transformation of the sector, with the objective of creating future giants ready to expand on the stock market. The operation was a success for Telus International on the customer service side. Telus Health is the second of the three subsidiaries that would normally take the same path.
Because Telus also has an eye on the agricultural sector, where demand is suddenly very high for digital automation and remote management solutions that require wireless communications, in particular. But like any good harvest, it will take time for Telus Agriculture to become a mature enough subsidiary to determine whether its success will match the other two.
Either way, both Telus’ senior management and investors are most concerned right now for its digital health business. Telemedicine, business insurance plans, management of employee benefits… Telus Health has expanded its portfolio of digital and connected tools in recent months to prepare for its listing on the Toronto Stock Exchange. At Telus’ head office in Vancouver, but also in Toronto and Montreal, where Telus Health has a strong presence, we hope for a success that will follow on from that experienced in February 2021 by Telus International.
On the way to the TSX
The specialist in digital customer service solutions hit a valuation of $8.5 billion on the Toronto Stock Exchange the day it hit the trading floor. This made it the most lucrative IPO in the Canadian tech sector.
“A year later, our CEO announced his colors: he hopes the same kind of reception for Telus Health when we go public. We just don’t know exactly when it will happen, but it’s coming,” says Martin Bélanger, vice-president, health insurance plan management for Telus business solutions.
Darren Entwistle, CEO of Telus, added at the beginning of August, recalling during a conference call with analysts the potential of this subsidiary. “The size of Telus Health will obviously be significantly amplified by our acquisition of LifeWorks. The combination of LifeWorks and Telus Health creates a world-class digital provider of integrated employee health, wellness and prevention services that already reaches more than 50 million people in Canada and around the world,” said he said.
LifeWorks, formerly Morneau Shepell, was acquired by Telus over the summer for $2.3 billion. LifeWorks generates annual revenues of just over $1 billion, which will roughly double the importance of health services to Telus’ total bottom line.
Most importantly, LifeWorks adds some 24,000 companies located across North America to Telus Health’s customer base. Clients who are just waiting to be offered state-of-the-art digital services… “We are going to add LifeWorks services to our telemedicine offer in Canada”, explains Martin Bélanger, “but this also gives us a window into the United United to bring our other solutions to a business market with great potential. »
This positioning raises Telus to another level in the connected health market, where the competition is a little more imposing. In the United States, this sector is disputed by digital giants like Amazon…
Grow by acquisition
Telus Health began in 2007 when the provider paid $760 million to acquire a digital health company called Emergis. Telus has, over the next fifteen years, invested more than 3 billion to increase its service offering in this sector which was struggling until two years of pandemic exploded demand for remote consultation and care solutions.
The specter of labor shortages hanging over several industries helps to “sell” the concept of telemedicine to companies who see it as a way to reduce absenteeism and therefore increase their productivity in a context where the hiring is more difficult. This demand has allowed the emergence of new companies, such as Montreal-based Dialogue, AlayaCare or Maple, to name a few. A situation that is to the advantage of a financially very comfortable company like Telus, admits Martin Bélanger.
“We regularly see new players appear, and we always keep an interest in what these new companies are creating, to see if it can fit into our business model,” he says.
A business model which, these days, has only one goal: to prepare for an entry on the Toronto Stock Exchange. Which, also taking into account Telus Agriculture, would confirm in a way the somewhat unexpected role of incubator for new billionaire companies that Telus has given itself in recent years.