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Clearbridge unit enters into MOU to expand lab testing services to Indonesia

CATALIST-listed medical tech company Clearbridge Health on Thursday said that its subsidiary SAM Laboratory has entered into an agreement that will see it expand its laboratory testing services to Indonesia.

The non-binding memorandum of understanding (MOU) was entered into between SAM Laboratory, PT Indo Genesis Medika (Indo Genesis) and PT Kreasi Putra Nusantara, and involves the proposed subscription of a controlling stake in the enlarged issued and paid-up share capital of Indo Genesis for an aggregate consideration of S$3.8 million.

Separately, Indo Genesis had on Aug 8 inked a conditional sale and purchase agreement with PT Indofarma Global Medika for the proposed transfer of and partnering to its 12 joint operation (JO) contracts, Clearbridge said. 

The 12 contracts, which collectively generated revenue of S$14.6 million, and a net profit after tax of S$1.5 million in the financial year ended Dec 31 2017, will enable Indo Genesis to operate diagnostics laboratories in public hospitals in Indonesia. 

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To facilitate this, SAM Laboratory will extend an interest-bearing loan of up to S$9.5 million to Indo Genesis.

Said Clearbridge's executive director and chief executive officer, Jeremy Yee: "The proposed investment in Indo Genesis is part of our strategy to expand our laboratory testing services regionally. Based on the historical performance of the JO contracts, we are optimistically confident that we are buying into a business that is earnings accretive for Clearbridge."

Directors of the company also expect the proposed investment to result in "revenue synergies" as the group will be able to leverage on Indo Genesis' existing network of hospital partners to deliver the group's precision medicine products and services in Indonesia.

Shares in Clearbridge Health closed at 24.5 Singapore cents apiece on Thursday, down 3.9 per cent, or one Singapore cent.