SINGAPORE - Perennial Real Estate Holdings is acquiring a 20 per cent stake in Aidigong, a Chinese maternal and child health management company.
The integrated real estate and healthcare company says it aims to expand its healthcare services in China to ride on growth opportunities from China's new two-child policy.
Perennial will acquire its shares from existing Aidigong shareholders Dongguan Common Splendor Asset Management Partnership and Ms Zhu Yufei, founder and chairman of Aidigong.
Perennial is paying 135.4 million yuan (S$28.7 million) for the stake.
This was arrived at after taking into account the business valued at 650 million yuan, which translates to about 9.7 times Ebitda - a measure of operating profit - of earnings forecast for this year.
Following the acquisition, Perennial will be the second largest shareholder of Aidigong, after Ms Zhu who will hold a 44.3 per cent stake.
Aidigong will also become an associated company of Perennial.
Established in 2007, Aidigong is a maternal and child health management company that combines traditional and contemporary methods in caring for mothers and newborns.
It currently operates two maternal and newborn health centres in Shenzhen and one post-natal treatment centre in Beijing.
The acquisition will enable Perennial to "invest directly in the growing medical and healthcare industry" and create a "new class of real estate assets to meet the growing demand for medical and healthcare space" in China.
Mr Pua Seck Guan, chief executive of Perennial, said that the company hopes to capture growth opportunities from China's two-child policy and the "resultant projected growth in annual births, and the demand for quality post-natal care for mothers and newborns by the affluent Chinese consumers".
China's two-child policy took effect on Jan 1 this year.
Under the new policy, about 90 million Chinese women are allowed to have a second child. Some 50 per cent of them are aged 40 and older.
Xinhua News reported in January that the Chinese government is ramping up maternal and child healthcare resources and services in response to an expected increase in later-age pregnancies and complications.