Acquisition By Kumpulan Perubatan (Johor) Sdn. Bhd. ("KPJSB"), a Wholly-owned Subsidiary of KPJ of An Additional 100,000 Ordinary Shares of RM1.00 Each, Representing 16% Equity Interest In Lablink (M) Sdn Bhd ("LMSB") From Dr. Patel Navinbhai Bhagubhai @ Ahmad Shukri Navin Abdullah For A Cash Consideration Of RM1,000,000
ACQUISITION BY KUMPULAN PERUBATAN (JOHOR) SDN. BHD. (“KPJSB”), A WHOLLY-OWNED SUBSIDIARY OF KPJ OF AN ADDITIONAL 100,000 ORDINARY SHARES OF RM1.00 EACH, REPRESENTING 16% EQUITY INTEREST IN LABLINK (M) SDN BHD (“LMSB”) FROM DR. PATEL NAVINBHAI BHAGUBHAI @ AHMAD SHUKRI NAVIN ABDULLAH FOR A CASH CONSIDERATION OF RM1,000,000
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1. INTRODUCTION
The Board of Directors of KPJ (“Board”) wishes to announce that the Company’s wholly-owned subsidiary, KPJSB, has on 27th August 2009 completed the acquisition of an additional 100,000 ordinary shares of RM1.00 each, representing 16% equity interest in LMSB from Dr. Patel Navinbhai Bhagubhai @ Ahmad Shukri Navin Abdullah for a cash consideration of RM1,000,000 (“Acquisition”)
Pursuant to the Acquisition, LMSB shall be a wholly-owned subsidiary of KPJ.
2. DETAILS OF THE ACQUISITION
Details of the Acquisition of LMSB
The consideration for the shares LMSB of RM1,000,000 was arrived at on a willing buyer willing seller basis after taking into account of the net assets.
LMSB registered an audited profit after tax (“PAT”) of approximately RM1.88 million and net asset (“NA”) of RM7.96 million for the financial year end (“FYE”) 31 December 2008.
The original cost of investments of the shares of LMSB held by Dr. Patel Navinbhai Bhagubhai @ Ahmad Shukri Navin Abdullah which was made from 2 November 1989 to 7 May 1996 amounted to RM100,000.
The shares were acquired free from any encumbrances.
Source of Funding
The purchase consideration for the Acquisition is financed from internally generated funds of KPJ and its subsidiaries (“KPJ Group”).
Liabilities to be assumed
There are no liabilities to be assumed by the KPJ Group arising from the Acquisition.
3. PROSPECTS OF THE HEALTHCARE INDUSTRY AND THE ACQUISITIONS
The demand for private healthcare has been good over the last few years. More people are seeking better medical care and services especially among urban dwellers. The growing affluence of the Malaysian population and their increasing demand for better healthcare services as well as the Malaysian Government’s national effort to promote health tourism has contributed to the growth in the usage of private hospitals in Malaysia. Under the Ninth Malaysia Plan, efforts will be undertaken to consolidate healthcare services, enhance human resource development and optimize resource allocation. Improvements in the delivery system will be undertaken with greater involvement of the private sector and non-governmental organizations.
In view of the above factors, KPJ Group believes that the prospect of the healthcare industry including LMSB remains promising.
4. INVESTMENT CONSIDERATIONS
The Board does not foresee any material risk pursuant to the Acquisition except for the inherent risk factors associated with healthcare industry, of which the KPJ Group is already involved in, and will be addressed as part of the KPJ Group’s ordinary course of business.
However, no assurance can be given that any adverse development in the abovementioned will not affect the business, prospects and / or future financial performance of KPJ Group.
5. RATIONALE FOR THE ACQUISITION
LMSB is principally involved in pathology and laboratory services and has been supporting KPJ Group since 1992. The Acquisition would enable LMSB to continue providing support to KPJ Group and to streamline KPJ Group corporate structure and integration of its business activities within its network of hospitals.
6. EFFECTS OF THE ACQUISITION
The effects of the Acquisition are as follows:-
6.1 Share Capital and Shareholding Structure
The Acquisition will not have any effect on the share capital and shareholding structure of KPJ as it will not involve and issuance of new shares in the Company.
6.2 Earnings per Share (“EPS”)
The Acquisition is not expected to have a material effect on the EPS of the KPJ Group for the FYE 31 December 2009.
NA
The Acquisition will not have any material effect on the NA of the KPJ Group.
Gearing
The Acquisition is not expected to have any material effect on the gearing position of the KPJ Group.
7. APPROVALS REQUIRED
The Acquisition is not subject to the approval of the shareholders of KPJ Group or any governmental authority.
8. DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTS
None of the directors or major shareholders of KPJ or persons connected with them has any interest, direct or indirect, in the Acquisition.
9. DIRECTORS’ STATEMENT
Having considered all aspects of the Acquisition, the Board is of the opinion that the Acquisition is in the best interests of the KPJ Group.
10. DEPARTURE FROM THE SECURITIES COMMISSION'S POLICIES AND GUIDELINES ON THE OFFERING OF EQUITY AND EQUITY-LINKED SECURITIES ("SC GUIDELINES")
To the best knowledge and belief of the Board, there are no departures from the SC Guidelines in connection with the Acquisition.
