Aoxin Q&M to acquire 49% stake in Acumen Diagnostics for S$29.4m through issue of new shares
CATALIST-listed Aoxin Q&M Dental Group 1D4 announced it has entered into a conditional sale and purchase agreement to acquire 49 per cent of Acumen Diagnostics for S$29.4 million.
To fund the acquisition, Aoxin Q&M - an associated company of Q&M Dental Group QC7 - will issue 127.3 million new ordinary shares at 23.1 Singapore cents per share, it said in a bourse filing on Monday.
Aoxin expects the acquisition will allow it to enter the medical diagnostics business in Singapore and capture a significant portion of the testing capacity market, as well as improve its profitability.
Medical technology company Acumen Diagnostics was set up in 2020 as a joint venture between Q&M and Ong Siew Hwa, the founder of Acumen Research Laboratories. It operates a Covid-19 clinical lab where polymerase chain reaction (PCR) tests for Covid-19 are processed.
Acumen Diagnostics has a preliminary valuation of S$60 million, derived based on its latest financial statements.
Post-acquisition, Aoxin Q&M will hold 49 per cent stake in Acumen Diagnostics, while Q&M will continue holding the remaining 51 per cent.
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This brings Q&M's effective interest in Acumen Diagnostics to 67.2 per cent, due to the former's 33 per cent equity stake in Aoxin Q&M. Q&M's direct shareholding interest in Aoxin Q&M will be reduced from 43.9 per cent after the issue of new shares.
The proposed acquisition is subject to, amongst others, the approval of the shareholders of Aoxin Q&M at an extraordinary general meeting to be convened.
Aoxin Q&M's deputy chief executive officer (CEO) Ryan San noted that the acquisition will be "immediately profit accretive".
"We believe this acquisition is an important and strategic one for Aoxin Q&M as the availability of good quality performing test kits and testing services will be an important cog in the overall national response to treating and living with Covid-19," he said.
Acumen Diagnostics will continue to be led by Dr Ong, and it will roll out new tests in the near term, while planning to develop vaccines in the longer term.
On Monday, shares of Aoxin Q&M closed at S$0.22, up S$0.01or 4.8 per cent, while shares of Q&M closed at S$0.565, up S$0.01 or 1.8 per cent.
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