Quantum Healthcare, on Feb 2, announced that it has proposed to acquire the businesses of three clinics operating under the Dental Hub Group.
The acquisition was scaled down from the initial acquisition of six clinics under the Dental Hub Group.
The three clinics under the acquisition are located at Alexandra Road, Bedok North and Choa Chua Kang. The previous agreement included other clinics that were located in Jurong West, Telok Blangah Crescent and West Coast Road. According to Quantum Healthcare, this is due to several factors such as the existing market conditions, the clinics’ financial performance, as well as the location of the clinics.
On Feb 1, Quantum Healthcare entered into a conditional business transfer agreement (BTA) with 84 INC Pte. Ltd., The Dental Hub @SG Pte. Ltd., and NDC Consulting Pte. Ltd (the vendors), New Silkroutes Group, as well as HSI Dental, Dr Ainsley Toh and Dr Foong Siew Hong (the existing shareholders).
The BTA was entered into for a total cash consideration of $1.65 million. The sale assets to be included as part of the proposed transfer include the vendors’ rights, benefits of and interests in the contracts, the minimum net working capital, receivables in respect of the period on or after the date of completion among others.
Each of the vendors are 70% owned by HSI Dental with the remaining shares held by Toh and Foong in equal proportions of 15% each. The vendors and HSI Dental are part of the Mainboard-listed New Silkroutes Group.
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Based on the unaudited pro forma combined financial statements for the financial period from July 1, 2021, to June 30, 2022, they recorded net profit before and after tax of around $276,488 and $253,394 respectively. The vendors’ net book value and net tangible assets (NTA) came at around approximately $561,994 as at June 30, 2022. Quantum Healthcare has not commissioned any valuation of the business.
The proposed transfer is subject to several conditions including the clinics collectively maintaining the minimum net working capital which is equivalent to at least two months of rental, salaries, and skill development levy payable by the employer. The aggregate sum would come up to around $90,200.
According to Quantum Healthcare, it believes that the proposed acquisition will “support and strengthen” its investments in the healthcare business.
Shares in Quantum Healthcare closed at 0.6 cent on Feb 1.