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Asian Healthcare Specialists eyes 51% stake in Cornerstone Asia Health
CATALIST-LISTED Asian Healthcare Specialists (AHS) on Friday said it has entered into a term sheet to acquire 51 per cent of Cornerstone Asia Health, a provider of healthcare services across various specialisations.
The cost of acquisition is estimated to be 13 times the profit after tax for Cornerstone Asia’s fiscal year ended June 30, 2019.
This will be satisfied by S$5 million in cash and the issue of shares in AHS at S$0.26 apiece.
This is a 1.4 per cent discount to the volume-weighted average price of AHS shares at S$0.2637 for trades completed on July 4, the day prior to the signing of the term sheet. The price has been adjusted for any share consolidation, share sub-division, or changes to AHS's share capital.
It is expected that a portion of the shares issued would be subject to a five-year moratorium, to be released within such period in tranches. Further details of the allocation of shares and cash to be paid will be outlined in the definitive agreement, the group added.
Cornerstone Asia Health offers key services in ophthalmology, urology, dermatology and gastroenterology, as well as family medicine. It has five specialists and medical doctors operating eight specialist and family medicine clinics.
The acquisition is conditional to the completion of satisfactory legal, financial and tax due diligence by AHS and if required, shareholder approval. Vendors Cornerstone Asia Health and its shareholders have also agreed to exclusively negotiate the acquisition for three months.
AHS shares closed at S$0.26 on Thursday, down 0.5 Singapore cent or 1.9 per cent.