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Medinex to buy business support services firm for S$1.2m

CATALIST-LISTED Medinex has inked a deal to buy privately-held business support services firm SKI Group for S$1.2 million in cash, the board disclosed on Tuesday.

It added that the deal - to be funded with proceeds from Medinex's initial public offering in 2018 - would let the group grow its customer base with "a greater number of potential clients in the (information technology) and advertising fields", where it does not have a strong presence.

Buying SKI Corporate Services and SKI Consultancy from owners Kwan Pek Yoke and Shen Suk Ka could improve Medinex's income and value, Medinex said. It plans to grow its business support services revenue by moving beyond clients in the core healthcare industry market.

Non-healthcare fees made up about one-fifth of the group's full-year revenue to Dec 31, 2018.

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The SKI Group deal could have bumped Medinex's earnings per share from 0.62 Singapore cent to 0.92 Singapore cent had it been done on Jan 1, 2018, the board added.

It said that the price tag took into account expected contributions from the target companies "and the synergies from the integration".

Unaudited consolidated management accounts put the SKI Group's pre-tax profit at S$413,219 for the 12 months to Dec 31, 2018, while net asset value was S$165,854, it said.

The deal is subject to conditions such as the SKI Group giving Medinex its balance sheet as at June 30, and having at least S$72,000 in cash for working capital by the completion date.

SKI Group's audited accounts for the year to June 30 must also be signed off by the auditors, BDO LLP and the company.

Medinex closed down half a Singapore cent or 1.79 per cent at S$0.285 on Tuesday before the announcement.