ComfortDelGro (CDG) has acquired a 90% stake in Ming Chuan Transportation for $8.5 million, in a bid to broaden its reach and strengthen its position in the growing medical transport sector.
CDG, through its wholly-owned subsidiary, ComfortDelGro MedCare, entered into a sale and purchase agreement (SPA) with Ming Chuan Transportation’s Neo Lay Kim and Ng Chew Chuah on Jan 7.
Ming Chuan Transportation is one of the largest wheelchair transport service providers in Singapore, with a fleet of 76 vehicles and a total staff and driver strength of 86.
Upon the completion of the acquisition, ComfortDelGro MedCare will have a total fleet of 92 vehicles, making it the largest wheelchair transport service provider in Singapore.
The move will allow ComfortDelGro MedCare to expand its specialised medical escort and transport services for the elderly and persons with mobility needs.
Founded in 2004 as a professional wheelchair transport company, Ming Chuan Transportation currently has six clients that operate a network of daycare and physical disability centres across Singapore.
See also: New Key Summary 123
The demand for Ming Chuan Transportation’s services have remained strong during Covid-19, with revenue growing by 15% in 2020 from 2019 despite the circuit breaker period from April to June 2020.
ComfortDelGro MedCare was launched in March 2021 to provide medical escort transport services as well as specialised transportation services to those with mobility issues.
Of the total consideration payable, $8.0 million will be paid upon completion. The balance amount will be paid to Neo and Ng within 12 months after the completion of the transaction.
See also: Resourse Library Event
The consideration will be fully paid in cash.
The transaction is expected to take place on Jan 24. Upon its completion, ComfortDelGro MedCare and Neo will hold 90% and 10% of the issued capital of Ming Chuan Transportation respectively; Ming Chuan Transportation will also become an indirect subsidiary of CDG.
“This opportunity has come at a time of increased demand for transportation services for mobility impaired passengers and senior citizens. Indeed, the healthcare sector has seen strong growth in the last two years amidst the pandemic. With this acquisition, we are confident we can reach out to more passengers with mobility issues and better serve them with our dedicated and trained staff,” says Lim Tien Hock, CEO of ComfortDelGro MedCare.
Jim Tan Jian Hao, business development manager of Ming Chuan Transportation adds that the company is “thankful for the opportunity to serve the community and is confident that ComfortDelGro MedCare, a wholly-owned subsidiary of ComfortDelGro, is able to bring the business to greater heights”.
“We are also pleased to announce that our existing drivers will continue their employment with enhanced terms under ComfortDelGro MedCare,” continues Tan.
Shares in CDG closed 3 cents lower or 2.16% down at $1.36 on Jan 7.
Photo: ComfortDelGro
