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New Silkroutes to acquire 2 Chinese firms for S$65m in new medical consumables push
NEW Silkroutes Group on Friday announced it is acquiring two Shanghai-based makers of medical consumables for S$65 million, as it seeks to expand its healthcare division and become a major supplier of such consumables in China and South-east Asia.
New Silkroutes, which has businesses in the healthcare and energy sectors, will fund the acquisition of both Shanghai Fengwei Nonwovens and Shanghai Fengwei Garment Accessory by issuing new ordinary shares in the company at 50 Singapore cents apiece.
The company has signed a legally binding memorandum of understanding with Shen Yuyun, who is chairman and general manager of the two Chinese companies
Both firms have been producing nonwoven fabric, nonwoven converted products and polyester wadding for use in the Chinese medical industry for more than 20 years, according to New Silkroutes. The products can be made into isolation gowns, disposable shoe covers, linen and drapes used in hospitals, and have been exported to North America and Europe.
New Silkroutes Group chief executive Goh Jin Hian said: "Amid growing concerns worldwide over infection control, disposable gowns, shoe covers, linens and other medical consumables are increasingly being used and adding to the overall cost of running hospitals and other healthcare facilities."
"Through this acquisition and with our experience in managing healthcare facilities, we can lower the cost of consumables for healthcare providers and help them enhance operating efficiency," Dr Goh added.
A day ago on Thursday, New Silkroutes announced a proposed share placement to raise proceeds of almost S$5 million.
It will issue some 11,363,636 new ordinary shares at 44 Singapore cents apiece, representing a 57 per cent premium to New Silkroutes' last traded price of 28 Singapore cents a share on Nov 28.
The company will lift the trading suspension on its shares on Monday. The counter has been suspended since Dec 4, 2017. This was to prevent any unusual share-price activity while it was in talks for potential acquisitions, New Silkroutes said on Friday.
In Singapore, New Silkroutes has nine dental clinics and another two clinics that provide complementary integrative therapies based on Western standards of medical care.
It also operates clinic and pharmacy management systems in Singapore
and China, and said it is exploring opportunities to manage hospitals in China andSouth-east Asia.