SINGAPORE - Catalist-listed HC Surgical Specialists said on Friday that it is acquiring 25 per cent of general practitioner (GP) clinic operator Medistar Services for $480,000, in a bid to expand its GP network.
It will fund the acquisition through net proceeds from its initial public offering in November 2016, the medical services group said in a regulatory filing.
The group has entered into a sales and purchase agreement (SPA) with vendors, GPs Tan Hooi Hwa, Pang Heng Mun Roger and Wong Yik Mun, for 25 per cent of the company. This was done together with Lai Junxu, a GP with the group, who will acquire 5 per cent of Medistar.
Upon the signing of the SPA, HC Surgical will make a cash payment of $139,000 to the vendors. The remaining $341,000 cash payment will be made upon the completion of the acquisition on an agreed date.
Meanwhile, Dr Lai will pay S$96,000 for his 5 per cent stake.
Upon completion, Medistar will be considered a 25 per cent associated company of HC Surgical, and will continue to be helmed by the vendors Dr Tan, Dr Pang and Dr Wong, who will remain shareholders of Medistar with a total equity interest of 70 per cent.
"The addition of the GPs will strengthen the group's capabilities and is in line with its plan for growth and expanding its presence in Singapore as the company's team of GPs will increase from five to eight," the statement added.
Medistar was incorporated in Singapore in 1982 and operates a GP clinic, The Ming Clinic, which operates at Camden Medical Centre. The clinic is also close to prime residential districts and the neighbourhood of private hospitals such as Gleneagles and Mount Elizabeth Hospital.
HC Surgical chief executive Heah Sieu Min said the acquisition is in line with the group's strategy of business expansion by acquiring GPs to secure a consistent stream of patients through GP referrals. He added that Dr Tan, Dr Pang and Dr Wong are industry veterans with a stable pool of patients.
HC Surgical said the proposed acquisition is not expected to have any material impact on its consolidated earnings per share or net tangible assets per share for the current financial year ending May 31, 2019.
HC Surgical shares were trading flat at $0.555 on Friday, as at 11.56am.