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MAINBOARD-LISTED Rowsley has inked a deal to acquire the Thomson Medical healthcare businesses from tycoon Peter Lim for S$1.6 billion to be paid mostly in stock.
Rowsley will acquire the privately held Thomson Medical, which is a provider of healthcare services for women and children in Singapore, and a 70.36 per cent stake in Malaysia-listed TMC Life Sciences (TMCLS).
To fund the purchase, Rowsley will issue 21.3 billion new shares at S$0.075 per share. Rowsley will also acquire 597 million TMCLS warrants in cash. After the new shares are issued, Mr Lim will own 90.07 per cent of Rowsley, up from 45.36 per cent.
Rowsley on Monday said that it has entered into a binding agreement to acquire Mr Lim's Sasteria Private Limited, which owns Thomson Medical and TMCLS. Medical assets in Sasteria have a value of about S$958.3 million.
Existing Rowsley shareholders will be offered two bonus warrants at an exercise price of nine Singapore cents for each existing share. For every bonus warrant exercised, a piggyback warrant can be exercised on a one-for-one basis. Each additional warrant has an exercise price of 12 Singapore cents per share.
"The bonus warrants and piggyback warrants are exercisable from the date of issue of the bonus warrants, up to the market day immediately preceding the first and fourth anniversary of the issuance of the bonus warrants respectively," Rowsley said.
If all the bonus and piggyback warrants are exercised, Rowsley will receive about S$850 million to S$1.13 billion of proceeds respectively, which the firm will use to fund its future growth and working capital.
Said Rowsley chairman, Ng Ser Miang: "Post-acquisition, Rowsley will be one of the largest SGX-listed (Singapore Exchange-listed) healthcare players... The changing demographics in South-east Asia suggest that private healthcare is poised for a sharp acceleration in growth."
Both Thomson Medical and TMCLS have plans to capitalise on burgeoning demand for healthcare services in the region. Thomson Medical will continue to grow beyond its current core obstetrics and gynaecology services by expanding its service offerings and opening more specialist clinics.
Meanwhile, TMCLS intends to make its Tropicana Medical Centre at Kota Damansara one of the largest integrated healthcare facilities in the Klang Valley by tripling its bed capacity. When the new wing is completed, the hospital will have a capacity of 600 beds, offering comprehensive tertiary healthcare services, Rowsley said.
In addition, TMCLS has plans to expand in Johor Bahru through the proposed Thomson Iskandar Medical Hub. A five-minute drive from the Causeway, the hub will be an integrated development that encompasses a 500-bed tertiary hospital, a 400-suite medical tower and a complementary retail space.
"The tertiary hospital, Hospital Iskandariah, will be equipped with state-of-the-art facilities and equipment, and will have seven Centres of Excellence in cardiology, diabetes, fertility, gastroenterology, oncology, orthopaedics and urology," Rowsley said.
Among other conditions, the transaction is subjected to regulatory approvals, minority shareholder approvals, and the successful fulfilment of conditions set out in the acquisition agreement. An EGM (extraordinary general meeting) is expected to be held in the first quarter of 2018, with a circular containing further details dispatched to shareholders in due course, Rowsley said.
When the intention to strike the deal was announced in July, the consideration had been indicated at up to S$1.9 billion.
The acquisition will see Rowsley transform from a real estate and hospitality group to a healthcare player. The company will change its name to Thomson Medical Group following the completion of the acquisition.
Rowsley requested a trading halt earlier this morning, pending the release of its acquisition announcement. The counter last traded at S$0.11 apiece last Friday, down 1.77 per cent. As at 12.12pm, the company has requested a lifting of its trading halt. Shares of the counter will resume trading when the market reopens at 1pm.