Skip to main content
A scary good deal on trusted journalism
Get full digital access to globeandmail.com
$0.99
per week for 24 weeks SAVE OVER $140
OFFER ENDS OCTOBER 31
A scary good deal on trusted journalism
$0.99
per week
for 24 weeks
SAVE OVER $140
OFFER ENDS OCTOBER 31
// //

Sun Life Financial Inc. will double the size of its U.S. employee benefits business with the US$2.48-billion purchase of oral health provider DentaQuest, vaulting the insurer into the underserved market for government-funded dental care.

Toronto-based Sun Life announced on Sunday it will purchase Boston-based DentaQuest, one of the largest providers of Medicaid dental benefits in the United States, employing about 2,400 workers in 36 states and servicing more than 33 million members. Dentaquest also caters to employers and individual customers.

The deal, which is expected to close during the first half of 2022, will be financed using cash and debt – and will see DentaQuest’s minority shareholder, Centerbridge Partners LP, sell its stake.

Story continues below advertisement

“We were looking at ways to add scale and capabilities in our U.S. group benefits space, and to be quite frank, we were smaller than we would have liked to have been on the dental side, “ Sun Life chief executive officer Kevin Strain said in a Monday interview with The Globe and Mail.

“When this transaction came up, it lifted us significantly, obviously on the dental side, but it also introduced us to – and this had not been on our radar prior to this – a business that was significant in the Medicare and Medicaid space.”

The deal will add US$100-million in underlying profit in the first full year after closing and boost the contribution of the U.S. division to Sun Life’s total underlying profit to more than 19 per cent, up from 16 per cent at the end of 2020, Sun Life chief financial officer Manjit Singh said during an analyst call.

“It adds significant scale to employee benefits, contributes even more diversification by entering into the government-programs space and increases our focus on capital-light health businesses,” Mr. Singh said.

The acquisition is expected to be immediately accretive to profits, Mr. Strain said, adding approximately 17 cents to its underlying annual earnings per share.

The deal is the latest in a handful of acquisitions Sun Life has made over the past six years, including the purchase of health care insurer; Pinnacle Care earlier this year and digital health care provider Maxwell Health in 2018.

National Bank research analyst, Gabriel Dechaine said the acquisition is a “financially attractive” deal that includes the addition of a large government program business that could see the pool of “potential members expand significantly if President Biden’s “Build Back Better” bill passes, and could expand dental coverage to all Medicare recipients.”

Story continues below advertisement

DentaQuest will become part of the Sun Life U.S. business and and continue to operate its network of about 117,000 dentists across the country. The company, which will retain its executive team, focuses on underserved communities and underserved populations.

“These populations often can’t find dentists who are willing to participate in Medicaid programs and a big part of what DentaQuest has done is bring access to dental care for people who had great difficulty accessing that there,” Dan Fishbein, president of Sun Life U.S., said in an interview.

“They have done a great job of finding very creative ways and approaches to expand access to previously underserved populations – and there may even be some opportunities for us to use that expertise outside the U.S. as well.

“There are certainly underserved communities in Canada and we would love to explore in the future how we could leverage some of that north of the border as well.”

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies