Asian Healthcare Specialists, on June 30, entered into a sale and purchase agreement (SPA) with the other shareholders of its subsidiary, Cornerstone Asia Health, to acquire the remaining 49% shares it does not own in the latter, for a consideration of $16 million.
Of the sum, $2.5 million will be paid in cash on the completion of the SPA, which will be funded by the proceeds of the placement of 17.7 million shares in the capital of Asian Healthcare Specialists on April 26.
The remaining $13.5 million will be satisfied by the issue and allotment of 72.97 million new shares to the shareholders of Cornerstone Asia Health at the issue price of 18.5 cents each.
Under the terms of the agreement, the shareholders have the right to designate the issuance of up to a total of 364,864 shares to its associates to have contributed to the success of Cornerstone Asia Health.
The issue price is at a premium of 7.25% over the volume weighted average price (VWAP) of 18.2 cents and 17.25 cents for trades done on June 30.
The consideration shares represent 15.41% of the company’s existing share capital and 13.35% of the enlarged share capital.
Cornerstone Asia Health was incorporated in Singapore on June 28, 2017, with a share capital of $35.8 million comprising 68.4 million shares.
Cornerstone Asia Health mainly provides multidisciplinary healthcare services across different specialisations and offers key services in ophthalmology, urology, dermatology, gastroenterology, as well as family medicine.
Its operations comprise eight specialists and family medicine clinics that are founded by doctors with over 20 years of experience each.
Among the specialists are five shareholders namely, Dr. Ng Tay Meng, Dr. Khoo Shih Wee @ Lawrence Khoo, Dr. Ho Siew Hong, Dr. Cheng and Dr. Seah Sheng Heang Geoffry. They own a total of 49% of the shares in Cornerstone Asia Health.
According to Cornerstone Asia Health’s financial statements for the 1HFY2021 ended March, its net profit after tax was $3.0 million.
Its net book value and net tangible assets was $1.7 million as at March 31.
Its net profit after tax for the FY2020 ended Sept 30, 2020, was $4.8 million.
The proposed acquisition is in line with Asian Healthcare Specialists’ business strategies and future plans in management and healthcare professionals as part of its growth and expansion strategy, says the group in a June 30 filing.
The proposed acquisition, upon completion, will give Asian Healthcare Specialists full control over Cornerstone Asia Health’s healthcare assets. It will also align the latter’s objectives with the former’s long-term strategic goals.
“Fully acquiring Cornerstone is another step towards achieving our vision to be a holistic and multi-disciplinary specialist healthcare provider in Singapore and across Southeast Asia,” says Dr. Chin Pak Lin, executive director and CEO of Asian Healthcare.
“We look forward to working even closer with Cornerstone to offer broader and deeper specialist services to a larger patient community, nurture our next generation of medical and management talent, and strengthen our value proposition to all stakeholders,” he adds.
Shares in Asian Healthcare closed 0.6 cent higher or 3.5% up at 17.7 cents on June 30.
Photo: Stock photo
