CFM to acquire 51% stake in firm distributing and selling pharma products

CFM Holdings has entered into a sale and purchase agreement (SPA) to acquire 51 per cent of the total issued ordinary share capital of SING-SWE MM Biotechnology for an aggregate consideration of up to S$6.1 million.

The company said on Thursday morning that it will acquire 51 ordinary shares from vendors Wang Xinmeng, Gao Hong and New Energy Industry Sweden (NEIS). Upon completion of the proposed acquisition, CFM will own 51 per cent of SING-SWE MM Biotechnology, which will become a subsidiary.

SING-SWE MM Biotechnology distributes and sells pharmaceutical products. As at Thursday morning, it has an issued and paid-up share capital of S$100 comprising 100 ordinary shares. NEIS will own the remaining 49 per cent of its issued share capital, down from 70 per cent before the proposed acquisition.

In consideration for the sale shares, CFM has said that it will allot and issue an aggregate of up to 120 million new fully-paid up ordinary shares in its capital at an issue price of 5.1 Singapore cents each to the vendors.

The consideration shares will be allotted free from encumbrances and will rank pari passu in all respects with the then-issued shares save for any dividends, rights, allotments or other distributions, CFM said.

In connection with the proposed acquisition, CFM intends to diversify and expand its business. SING-SWE MM Biotechnology owns exclusive distribution rights to certain viral test kits in Europe, Africa, South Asia, South-east Asia and the Middle East, and intends to invest in and develop its own products in related fields.

CFM is already involved in the distribution and sale of gloves and other personal protective equipment, and believes that the acquisition will provide additional and recurrent revenue streams.

As SING-SWE MM Biotechnology is a newly-incorporated company with no historical financial statements, CFM is unable to provide the illustrative financial effects of the proposed transactions. The company said that it will set out the financial effects and other financial information, after the vendors deliver the management accounts to it by Aug 15.

CFM shares closed up 5.3 cents or 80.3 per cent to 11.9 cents on Thursday.