HC Surgical taps IPO proceeds for equity stake in endoscopy practice

MEDICAL services group HC Surgical Specialists said after Monday's trading close that it has reallocated about S$800,000 of its initial public offering net proceeds mainly to acquire a 51 per cent equity stake in Jason Lim Endoscopy and Surgery Pte Ltd (JLES).

On Monday, the listed group entered into a sale-and-purchase agreement for the equity stake in JLES for S$832,000. Post-acquisition, the sole proprietor behind the acquisition target, Dr Jason Lim Wei-Min, will join HC Surgical as a specialist surgeon and will oversee JLES.

The agreement called upon HC Surgical to pay S$150,000 in cash as part of the purchase consideration on signing the deal with JLES and Dr Lim.

As the nominee of JLES, Dr Lim will receive 300,000 new shares that will be pegged at 68 Singapore cents apiece in HC Surgical on starting his employment with the listed company. On the same date, HC Surgical will pay another S$478,000 in cash to JLES.

The acquisition deal is subject to several conditions, including the appointment of HC Surgical's chief executive Heah Sieu Min and one other nominee as directors of JLES.

On completing the proposed acquisition of the 51 per cent stake, HC Surgical will enter into a second sale-and-purchase agreement to buy out the remaining 49 per cent equity interest in JLES.

HC Surgical disclosed separately on Monday the reallocation of some S$800,000 of IPO net proceeds primarily for the proposed acquisition of the 51 per cent stake in JLES. These proceeds were previously earmarked for expansion of the group's surgical facilities.

It also added that S$1.2 million of the IPO net proceeds initially allocated for its working capital had also been reallocated to expand its business operations locally and regionally.

The medical services group had on June 1 announced two other proposed acquisitions for equity interests in Medinex Pte Ltd and Medical L & C Services Pte Ltd.

The deal for a 49 per cent stake in Medinex was valued at a purchase consideration of S$4.32 million. A second sale-and-purchase agreement for some 51 per cent interest in Medical L & C was pegged at a purchase consideration of S$1.05 million.

HC Surgical closed flat at S$0.675 on Monday.