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No downtime for Novena Global as Lohs inject growth through M&As
THREE years since the founders of Singapore-based Novena Global Lifecare ditched plans to go public in Taiwan and instead dipped into the deep pockets of Chinese investors, the Loh cousins have set their heart on the Singapore Exchange.
This time, the former investment bankers Nelson Loh and Terence Loh are using another private vehicle in their ballooning stable, Dorr Global Healthcare International, to buy out Catalist-listed Axington Inc, which up until April this year was known as Axcelasia.
The Singaporean duo cannot say more than what is in the offer document - Dorr Global said it retains the flexibility to review Axington's business for "optimal strategy" - but this much, Mr Nelson Loh can say: "Obviously, we have plans for the listco . . . it's a natural extension to list one of our businesses here," he said, when prodded in an interview with The Business Times.
Novena Global is part of the Dorr Group - the Lohs' holding company and investment vehicle, which manages some US$4 billion in assets for predominantly family offices and to a smaller extent, private equity and venture capital firms.
Following a merger with Vancouver-headquartered Bellagraph Group - a luxury and consumer lifestyle multinational firm - only this week, the parent firm is now called Bellagraph Nova Group.
Both men are pitching Novena Global, an aesthetics and health screening firm, as a "platform player" whose backbone is its customer database. For that reason, they count the likes of tech giants Alibaba and Tencent as competition and less so, the true-blue healthcare operators.
Novena Global has so far pooled the data on skin and hair needs of some 10 million "users" through its customer relationship management (CRM) data analytics. Monetising the database is key and for that reason, the self-proclaimed "serial entrepreneurs" are keen to expand their "content" beyond what they already have on their plate - aesthetics, health screening, dentistry and ophthalmology.
"We are first and foremost a technology player - a tech platform, seeking to foster growth in traditional segments. With this database, we can offer everything. It may seem like segregated business units, but we function as one CRM or engine and cross-sell. If you own the database, the content will come to you," said Mr Nelson Loh.
Novena Global has 250 centres across 20 cities, mostly concentrated in North Asia (China and Taiwan account for 30-40 per cent of some US$1 billion in revenue) as well as in Singapore, Malaysia, Indonesia, India and pockets in Europe and Australia.
The firm has come a long way since 2017, when it decided not to push through with a plan to raise US$150 million by listing on the Taiwan Stock Exchange. Taiwan was a preferred listing venue as the firm is a leading provider of health screening services there.
It has drawn notable strategic Chinese investors namely Shunwei Capital - a VC fund co-founded by Xiaomi co-founder Lei Jun; Sinovation Ventures, which was started by ex-Google China president Kai-Fu Lee; and state-owned medical platform player Sinopharm Group. The cousins own around 65 per cent of the firm while the rest of the investors, including Singapore's healthcare veteran and former boss of Parkway Holdings Lim Cheok Peng, do not own more than 5 per cent each.
"Once we had these Chinese investors, listing in Taiwan was no longer an option. We made the right call . . . Obviously with their capital, we managed to grow the group," said Mr Nelson Loh.
Revenue has risen fivefold to US$1 billion, staff strength has quadrupled to 2,000 while full-time medical professionals and specialists have doubled to 200 in three years.
By segment, products - mainly skincare - and medical specialities contribute 30 per cent each to Novena Global's revenue while aesthetics and corporate health screening account for the remaining 20 per cent each.
While the group has positioned itself as a champion of affordable medical health care, it has found it hard to resist tapping the ultra-high net worth segment. In fourth quarter, it expects to open its US$40 million "first uber luxury anti-ageing medical wellness facility" within the Bvlgari Hotel Shanghai. The venture is a result of a tie-up with Switzerland's Clinique La Prairie. "This (high-end) will be a new client segment," said Mr Terence Loh.
The last three months have been super busy for the Lohs. "We have a lot of runway . . . a strong balance sheet. Our immediate objective is to further grow the business. There is a lot we can do," said Mr Terence Loh.
In January, the firm bought two day surgery centres in Singapore's Orchard Road area for around S$20 million. Earlier this month, it forked out S$20 million to buy Chinese tech firm and beauty brand Doco to sink its teeth deeper into the beauty device market.
Prompting the recent moves are more "sensible" valuations thrown up by the coronavirus pandemic, which has also led to a boom in the space of telehealth.
Mr Nelson Loh remarked: "What used to be very hard for us to promote - remote health care - have boomed in the last three months. We have been pushing this since we started this initiative but there was inertia . . . It's at an inflection point now. The ironic thing is we are one of a few beneficiaries in this climate".