CATALIST-LISTED Quantum Healthcare : V8Y 0% announced on Thursday (Feb 2) it is scaling back its acquisition of mainboard-listed New Silkroutes Group’s : BMT 0%businesses after its original agreement to acquire six clinics for S$4.5 million lapsed.

The revised conditional business transfer agreement now has a reduced consideration of S$1.7 million for only three of New Silkroutes Group’s The Dental Hub-branded clinics at Alexandra, Bedok and Yew Tee.

The healthcare company originally said it intended to purchase a total of six The Dental Hub clinics, including those at Boon Lay, Telok Blangah and West Coast. 

Its decision to scale back the acquisition came after considering existing market conditions, the clinics’ financial performances and their locations. Acquiring three out of the original six clinics will allow the group to broaden its operations in the north-western, southern and eastern parts of Singapore, it added. 

A scaled-back acquisition will also be “in the best interests of the company” at present, said Quantum Healthcare, as it “continues to evaluate and consider how the company’s investments and ventures in the healthcare business can be further supported and strengthened”.

The reduced S$1.7 million consideration accounts for the value of the three clinics’ vendors, who have an unaudited pro-forma combined gross revenue of some S$2.7 million and profit before tax of S$276,488 for the financial period between Jul 1, 2021 and Jun 30, 2022. 

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It also took into account the vendors’ agreement to maintain the minimum net working capital on completion of the proposed transfer, the vendors’ background and their broad customer base.

The vendors of the three clinics – The Dental Hub@SG, 84 Inc and NDC Consulting – are private companies with a 70 per cent ownership by HSI Dental (HSID). The vendors and HSID are part of investment holding company New Silkroutes Group. 

Quantum Healthcare said it intends to retain the working team of these vendors – comprising about 10 employees including dental and senior assistants, as well as executives – with intentions to further expand the team. 

The group also noted the vendors’ potential to further expand the scope of dental procedures offered through the expertise of Asia Dental Group, a 60 per cent-owned subsidiary of Quantum Healthcare. 

The proposed transfer is not expected to have any material impact on the net earnings per share or net tangible asset per share of the group for FY2023 ending Dec 31, 2023, the healthcare company said. 

Shares of Quantum Healthcare remained unchanged at S$0.006 after the news on Thursday.