ComfortDelGro acquires 90% stake in Ming Chuan Transportation for S$8.5m

TRANSPORT operator ComfortDelGro C52 : C52 0%on Monday (Jan 10) said its subsidiary, ComfortDelGro MedCare (CDG MedCare), has entered into a sale and purchase agreement with Neo Lay Kim and Ng Chew Chuah to acquire a 90 per cent stake in Ming Chuan Transportation for S$8.5 million.

Founded in 2004, Ming Chuan Transportation provides transport services for passengers with limited mobility, with a fleet of 76 specialised vehicles.

The acquisition will allow CDG MedCare to expand its specialised medical escort and transport services for the elderly and persons with mobility needs, said ComfortDelGro.

Upon completion of the acquisition, CDG MedCare will have a total fleet of 92 vehicles, cementing its position as the largest wheelchair transport service provider in Singapore, the company added.

Lim Tien Hock, chief executive of CDG MedCare, said the opportunity comes at a time where there is growing demand for transportation services for mobility impaired passengers and senior citizens, especially amid the Covid-19 pandemic.

"With this acquisition, we are confident we can reach out to more passengers with mobility issues and better serve them with our dedicated and trained staff," he said.

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The total consideration payable for the transaction is S$8.5m, of which S$8m is payable on completion. The balance consideration will be paid to the Neo and Ng upon expiry of a 12-month period from the completion of the transaction, provided that, there are no claims against them as at the expiry of the 12-month period, said ComfortDelGro. The consideration will be fully satisfied in cash and funded through internal resources.

The consideration was arrived at on a "willing-buyer and willing-seller" basis, taking into account the net book value of the business and assets of Ming Chuan Transportation, among others, the company added.

The transaction is expected to be completed on Jan 24, said ComfortDelGro. Upon completion of the transaction, CDG MedCare and Neo will hold 90 per cent and 10 per cent of the issued capital of Ming Chuan Transportation respectively, and it will become an indirect subsidiary of ComfortDelGro.

The transaction is not expected to have material impact on ComfotDelGro's net tangible assets per share or earnings per share the financial year ending Dec 31, 2022.

ComfortDelGro shares last closed at S$1.36, down S$0.03 or 2.7 per cent, on Friday (Jan 7) before the announcement.

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