Just one week after Q&M Dental Group announced plans to acquire a local rival dental chain, it has announced a much bigger deal to acquire an unnamed dental group in Australia.
According to Q&M, this acquisition, first flagged by The Edge Singapore in a story published on March 5, will help the company expand its footprint into the wider Asia Pacific region.
Besides its home market Singapore and Malaysia and China, Q&M is in the midst of acquiring a dental group in Thailand as well.
This means the company is pursuing three concurrent M&A deals.
Q&M says that this acquisition in Australia will give it a "strategic operating base" to further expand Down Under.
Under terms of an MOU announced on March 11, Q&M is spending A$144.5 million on this deal.
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First, Q&M will spend A$30 million as fresh capital for the Australian target, it will then pay A$59.5 million in cash to the sellers, which is a group of eight dentists.
The remaining consideration will be paid using new Q&M shares priced at 70 cents each.
These new shares will be subject to a 15-year lock-up. The dentists taking the shares are to also sign a 15-year service agreement.
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According to Q&M, the Australian target operates more than 40 clinics across various states of Australia. It is manned by around 120 dentists.
As part of this deal, the Australian target will guarantee a profit of A$105.7 million in the next seven years upon completion of the deal.
The eight equity-owning dentists are expected to help provide "local market expertise" and alignment with the long-term growth of the platform.
In his recent interview with The Edge Singapore, Q&M's founder and CEO Ng Chin Siau described how the company, having topped up its warchest with a bond issue and having put behind its troubled subsidiaries, has now worked back up an appetite to grow by acquisitions.
Specifically for Australia, he figures that he can aim to bring 1,000 of the 8,000 dental clinics under his fold.
In Singapore, the home market, Q&M holds a market share of around one third.
Q&M shares closed at 55 cents on March 11, up 3.81% for the day, extending a gain of 81.67% in the past year.
