Billionaire Peter Lim is injecting the privately held Thomson Medical Group and other healthcare assets into the Singapore-listed real estate firm Rowsley for $1.6 billion.
The deal is expected to be completed in the first quarter of next year. Rowsley will then be renamed Thomson Medical Group to reflect its change in focus to healthcare.
Rowsley will acquire Thomson Medical, the provider of healthcare services for women and children in Singapore which Mr Lim privatised for around $513 million in 2010.
It will also acquire a 70.36 per cent stake in Malaysia-listed TMC Life Sciences (TMCLS), which has a market cap of RM1.47 billion (S$485.5 million).
TMCLS owns the 200-bed Tropicana Medical Centre in Klang Valley, Kuala Lumpur, and plans to add 400 more beds at the end of 2020.
TMCLS also plans to complete Thomson Iskandar Medical Hub in Rowsley's Vantage Bay Healthcare City in 2021.
After paying for the purchase by issuing 21.3 billion new shares to Mr Lim at 7.5 cents apiece, Rowsley's market cap would swell to $2.13 billion. That would make Rowsley larger than rival hospital player Raffles Medical Group, which has a market cap of $1.93 billion, Rowsley told a briefing at the Goodwood Park Hotel yesterday.
Rowsley shares surged 2.5 cents, or 22.52 per cent, to 13.6 cents yesterday after the deal was announced, and was the top active counter with 305.8 million shares changing hands.
Rowsley announced plans in July to spend up to $1.9 billion to buy Mr Lim's healthcare assets and acquire one or more other medical practices. These other acquisitions did not pan out, it said yesterday.
After Mr Lim's asset injection, roughly two-thirds of Rowsley's revenue will come from healthcare, said Thomson Medical executive chairman Roy Quek.
Thomson Medical and Mr Lim's share of TMCLS raked in $199.4 million in revenue in the 12 months to Aug 31, up from $193.3 million in the same period a year earlier.
These assets generated a net profit of $32.8 million, up from $26.7 million in the year before.
Rowsley plans to undertake a strategic review of its non-healthcare assets, including real estate, consultancy and hospitality operations, once shareholders approve the deal.
Healthcare is a hot sector in Singapore as its population ages.
Dr Beng Teck Liang, chief executive of Catalist-listed clinic operator Singapore Medical Group, welcomed the entrance of a new listed healthcare player in the local market. He told The Straits Times: "It's good because it raises the profile of all healthcare companies, when it's such a large listing.
"Hopefully we can do a bit more to raise Singapore's profile in the region, so that we can attract more medical tourism. A lot of growth is coming from the region."
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