HC Surgical Specialists to wholly acquire subsidiary with purchase of 49% stake for $9 million

HCSS CEO Heah Sieu Min said the acquisition was part of the company's strategy to scale up and recruit more professionals. PHOTO: ST FILE

SINGAPORE - Gastrointestinal medical services specialist clinic group HC Surgical Specialists (HCSS) is buying up the remaining 49 per cent stake it does not own in subsidiary Jason Lim Endoscopy and Surgery (JLES) for $9 million.

Upon completion of the acquisition, HCSS will own 100 per cent of JLES.

The company said acquisition was in line with its long-term plans for growth. This includes inducting Dr Jason Lim, who owns the 49 per cent stake in JLES, as a professional staff member of the group.

"The acquisition will continue to enhance the working relationship with Dr Lim and will motivate Dr Lim, having commenced his employment with the group since Aug 13, 2018 and recognised the synergies of being part of the group, to further improve the profitability of JLES," HCSS said on Monday (Aug 23).

Based on the unaudited accounts for the 12 months ended May 31, JLES profit before tax was $1.5 million.

Its net tangible assets and net assets each stood at approximately $1.31 million.

Eighty per cent of the total purchase consideration of $9.06 million will be satisfied in cash over a period of two years.

The remaining 20 per cent in shares in HCSS will be issued two years later, at an issue price based on the volume weighted average price of the company's shares for the full market day on the day immediately prior to the issuance.

HCSS chief executive Heah Sieu Min said the acquisition was part of the company's strategy to scale up and recruit more professionals.

"Dr Lim is a talented specialist who has proven to be very popular with patients, and is a fast learner in terms of growing his business and management skills. We are excited to be part of his growth journey as we fortify our relationship with Dr Lim through this acquisition," Dr Heah said.

"We will continue to execute on our corporate strategy in looking out for young talented specialists like Dr Lim, providing them with the necessary support and platform for growth."

HCSS' net profit attributable to shareholders doubled to $8 million for the year ended May 31, from $3.99 million a year earlier. Revenue rose 40 per cent to $23.4 million. The company paid a dividend of four cents per share for the financial year.

HCSS' share price has risen 75 per cent over the past year, and closed at 51 cents on Monday.

Join ST's Telegram channel here and get the latest breaking news delivered to you.