HC Surgical brings on board specialist surgeon in acquisition

HC Surgical Specialists has entered a sale-and-purchase agreement for a new endosocopy and surgery business that will be managed by specialist surgeon Goh Minghui, with whom the company has signed a service agreement, the Catalist-listed company said on Monday after the market close.

HC Surgical is acquiring a 51 per cent stake in GMH Endoscopy & Surgery Pte Ltd (GMHES) for a total purchase consideration of S$765,000, from GMH Surgical Pte Ltd - which is wholly-owned by Dr Goh - and Dr Goh herself.

GMHES was incorporated on March 17 and has yet to start operations. Following the completion of the proposed acquisition, GMHES will become a subsidiary of HC Surgical. Its principal activity will be providing endoscopic procedures and general surgery services, with a focus on colorectal procedures, which is aligned with the group's core business.

HC Surgical has also signed a service agreement with Dr Goh, who has worked in public hospitals for over 13 years and is currently a consultant surgeon in Singapore General Hospital's department of colorectal surgery. She will manage GMHES for at least 11 years.

With the addition of Dr Goh, HC Surgical now has six specialists.

The total purchase consideration will be satisfied by a mixture of cash and shares. This includes a S$15,000 cash payment upon the signing of the agreement; S$189,120 by the issuance of 480,000 shares in HC Surgical upon Dr Goh's employment, at an issue price of 39.4 Singapore cents per share; and a S$560,880 cash payment on Dr Goh's employment date.

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The purchase consideration was arrived at on a willing-buyer-willing-seller basis, "taking into account the future potential of GMHES and the synergistic benefits for the group", said HC Surgical.

Subject to completion of the proposed acquisition, HC Surgical will enter into a separate sale-and-purchase agreement to buy the remaining 49 per cent stake of GMHES at a later stage. This is to occur by Nov 1, 2024 or such other date to be agreed between GMH Surgical, Dr Goh and HC Surgical.

The additional shares will be purchased at an amount that is 49 per cent of 10 times the audited profit after tax of GMHES, for the financial year ending May 31, 2024. This consideration was arrived at based on arm's length commercial discussions among the three parties, "after considering factors including potential earnings and the synergies between GMHES, Dr Goh and the group," said HC Surgical.

HC Surgical shares closed down three Singapore cents or 7.14 per cent at S$0.39 on Monday before the news.