Beauty service chain Mary Chia Holdings is paying $3.05 million to buy 80% of hairdressing chain Monsoon Hairdressing.
The seller, Addy Lee, also known as Lee Eng Tat, will receive his payment in equal parts cash and new Mary Chia Holdings shares.
For the half year ended June 30, Monsoon reported earnings of $1.07 million, and as at June 30, it had a net asset value of $145,888.
To help pay for the acquisition of Monsoon, an investor Michael Marcus Liew will chip in $800,000 by subscribing for 5,555,556 new Mary Chia Holdings shares at 14.4 cents each. Liew is known to have existing interests in other wellness-related companies.
Wendy Ho, chairman and CEO of Mary Chia (picture, right, with her mother, Mary Chia), says the combined entities can achieve greater economies of scale.
In addition, they can cross-sell products and services. “We believe that our established operations and strong customer base will benefit immensely from our merger,” she says.
For the year ended March 31, Mary Chia Holdings reported revenue of $8.8 million, similar to the preceding year’s.
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However, losses widened to $9.2 million from $2.6 million, as the company made impairment on property and right-of-use assets.
