Catalist-listed Singapore Medical Group (SMG) is acquiring an 85 per cent stake in Pheniks, which operates local aesthetics clinic SW1, with plans to expand the brand across the region.
SMG will pay up to $6.5 million, with up to $3 million to be paid in cash over three years, while the balance will be satisfied through the issuance of some 6.05 million new shares at 57.8 cents per share.
Separately, SMG announced it is planning to undertake a renounceable, non-underwritten rights issue of up to 23.04 million new shares at an issue price of 48 cents per rights share, on the basis of one rights share for every 20 existing shares, to raise up to $11 million. The maximum net proceeds, after deducting rights issue-related expenses, would be $10.8 million.
The issue price represents a discount of about 14.3 per cent to the closing price of 56 cents per share as at Feb 27, the last trading day prior to the announcement.
AT A GLANCE
$68 million (+63.5%)
$8.5 million (+250.8%)
SMG's chief executive officer, Dr Beng Teck Liang, along with shareholders Tony Tan Choon Keat, Dr Ho Choon Hou and Dr Wong Seng Weng, collectively have a 38.69 per cent stake in the healthcare group and have committed to fully subscribe for their entitled rights shares of around 8.88 million.
SMG said it plans to use 70 per cent of the net proceeds raised for mergers and acquisitions, and the remaining 30 per cent to grow the existing business. An extraordinary general meeting will be convened to ask shareholders to vote on the rights issue.
SW1, in Paragon Medical Centre, was set up by The Sloane Clinic founders, Dr Low Chai Ling and Dr Kenneth Lee, last December with a $1 million investment. The centre, which has five medical aesthetics practitioners and a plastic surgeon, broke even within the first two months of operations, SMG said.
There are also plans to take SW1 regional, Dr Beng said. About 30 per cent of SW1's patient volumes are from overseas.
For the financial year ended Dec 31, 2017, SMG reported a 250 per cent jump in net profit to $8.5 million from a year ago. Revenue rose 63.5 per cent year on year to $68 million.