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Mary Chia to buy 80% of Monsoon Hairdressing from celebrity hairstylist Addy Lee

Monsoon hair salon - GOOGLE MAPS.JPG
"Mary Chia will be able to leverage Addy's established overseas presence, particularly in China, to expand our reach in the Chinese market swiftly."

CATALIST-LISTED beauty and wellness firm Mary Chia Holdings has entered into a sale and purchase agreement to buy an 80 per cent stake in five companies under the Monsoon Hairdressing group for about S$3 million.

The seller is Lee Eng Tat, or Addy Lee, a celebrity hair stylist and the founder of Monsoon, Mary Chia announced on Tuesday night. The target companies are primarily in the business of providing hair services and hair care products.

Half of the consideration for the deal will be paid in cash. The remainder will be satisfied by the issuance of new shares in the company subject to certain conditions, Mary Chia said.

Separately, the firm on Tuesday also announced that it has entered into a subscription agreement with I Concept Global Growth Fund, that will raise S$800,000 to partially fund the proposed stake purchase in Monsoon.

The subscriber has agreed to take on about 5.6 million new shares in Mary Chia at an issue price of 14.4 Singapore cents. The issue price represents a 10 per cent discount from the counter's volume-weighted average price of 16 Singapore cents on Sept 22, being the last full market day prior to the date of the subscription agreement.

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I Concept Global Growth Fund's sole shareholder is Michael Liew, who is purchasing the shares "purely for investment purposes", with no intention of influencing the firm's management or exercising control over the company, Mary Chia said. Mr Liew was introduced to Mary Chia by a substantial shareholder of the firm.

He has also agreed to provide additional funds of S$600,000 to Mary Chia by no later than March 31, 2021, the terms of which will be set in a subsequent subscription agreement, the firm said.

Mary Chia noted that the target companies are complementary to the group's current beauty and wellness offerings.

It intends to cross-sell products to customers, providing them with a wider variety of products and services. It added that the proposed acquisition could lead to cost savings from joint resources and possibly the sharing of premises, which constitute a major part of total operating costs.

Wendy Ho, chairman and chief executive of Mary Chia, noted that the group will be able to achieve greater economies of scale with the proposed merger.

"More importantly, Mary Chia will be able to leverage Addy's established overseas presence, particularly in China, to expand our reach in the Chinese market swiftly," she added.

Mary Chia shares last traded at S$0.16 on Sept 22.

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