Hyphens Pharma to acquire Novem companies for S$16.3 million

CATALIST-LISTED Hyphens Pharma will acquire Novem Healthcare, Novem Pharma and Novem Sciences (Novem companies) for S$16.3 million to augment its current healthcare products and services.

In a bourse filing on Tuesday (Nov 9), the pharmaceutical and consumer healthcare company announced a sale and purchase agreement that will add over 40 brand principals across Europe and Asia and over 1,000 active customers such as hospitals, general practitioners and specialists with the acquisition.

Novem's product portfolio consists of over 150 products of their proprietary brand of generic medications and in-house health supplements. Diseases Novem caters for include cardiology, ophthalmology and general surgery.

This acquisition represents an opportunity for an earnings accretive transaction, as well as a portfolio of businesses that is financially attractive with a good management team. Hyphens will gain access to new brand principals, products and customers that would benefit the top and bottom line.

Furthermore, this move follows the pharmaceutical and consumer healthcare company's strategy of investing in proprietary brands, with the addition of Novem strengthening that business segment. Lim See Wah, executive chairman and chief executive officer of Hyphens Pharma, expects a boost in growth of their proprietary brands business with this acquisition.

"Besides being earnings accretive, the acquisition of Novem will help to cement our market leadership in Singapore and expand our product portfolio, while giving us access to new principals, market segments, and customers like the restructured hospitals," said Lim.

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Hyphens will acquire the Novem companies from Albert Ng and Lau Jui Feng. Ng, who is the founder of the companies, will be entering into an employment contract as the managing director and director of each of the Novem companies. Hyphens will continue to leverage on Ng's over 20 years of experience with his suppliers and customers.

"Being part of the group, Novem will be able to leverage Hyphens' strength in the private sector to accelerate our growth in Singapore and capitalise on new opportunities," said Ng.

The acquisition will be paid for in cash and shares, with 85 per cent or S$13.8 million in cash and 15 per cent or 8.3 million in shares priced at S$0.2926 per share. The share price was higher than the volume weighted average price (VWAP) for trades done for 5 full market days prior to the agreement and 90 per cent of the VWAP for trades done on the full market day preceding the agreement.

Shares of Hyphens last traded down 1.69 per cent or S$0.01 to S$0.29 on Friday (Nov 5) prior to the trading halt called on Monday (Nov 8) before the market opened.

Read more:

• Brokers' take: KGI upgrades Hyphens Pharma to 'outperform' after Q1 comeback
• Hyphens Pharma to expand presence in South Korea through distribution agreement with JSPharma
• Hyphens Pharma books provision for unsold Covid-19 test kits; Q3 profit halves