Sun Life signs $2.5 billion deal to acquire DentaQuest, the Boston-based dental insurer

Transaction would be the second largest in Sun Life’s long history, moves Canadian insurer into government-subsidized markets in the US

Sun Life U.S. employs 3,600 people, including 1,200 in Massachusetts.Brent Lewin/Bloomberg

Canadian insurer and fund manager Sun Life Financial reached a deal on Sunday to buy Boston-based DentaQuest for $2.475 billion and fold the dental insurer into Sun Life’s US operations.

Dan Fishbein, president of Sun Life U.S., said DentaQuest’s owners, the nonprofit CareQuest Institute for Oral Health and private equity firm Centerbridge, decided to sell DentaQuest a few months ago. Sun Life made a play for DentaQuest to grow its dental insurance portfolio, particularly in government-funded programs, such as those subsidized through Medicaid and Medicare Advantage. Sun Life offers dental insurance through employer-sponsored plans, but not publicly subsidized plans. DentaQuest has more than 33 million members across 36 states and projected 2021 revenue of $2.7 billion.

“We’re excited about becoming one of the top leaders nationally in dental,” Fishbein said. “DentaQuest has a real focus on underserved communities. That’s really what they’re all about. ... We really like that they’ve been able to open up access to people who don’t normally have access. We’re excited to be a part of that.”

This will be the biggest acquisition in Toronto-based Sun Life’s 156-year-history after its purchase of Clarica Life Insurance Co. two decades ago.

Fishbein said he doesn’t expect any significant job cuts as a result of the DentaQuest deal, and it’s likely that Sun Life will keep the DentaQuest brand on at least some of the dental insurance products. He said he plans to retain DentaQuest’s offices, at least for now, including its headquarters at the Schrafft Center in Charlestown. DentaQuest has 2,400 employees, including 420 based in Boston, while Sun Life U.S. employs 3,600 people, including 1,200 in Massachusetts. (MFS Investment Management, the Boston fund company, is run separately by Sun Life Financial and is not part of the Sun Life U.S. business.)

“This is a complementary combination,” Fishbein said. “Obviously, there could be some changes over time as we put some things together. That’s not the focus here. The focus is on growth.”

Sun Life U.S. is technically based in Wellesley, with several other offices around the country, but Fishbein made a conscious decision during the COVID-19 pandemic to no longer designate Wellesley as its head office. Instead, it is referred to internally as one of the company’s “business hubs.”

Fishbein said DentaQuest CEO Steve Pollock and his management team will stay with Sun Life after the acquisition is completed, with Pollock slated to run the dental business at Sun Life U.S.

“We are working very hard to make sure that this transition is seamless,” Pollock said. “We believe this will actually enhance the services [for members], because we’ll have more access to care with a larger network and better customer service capabilities.”