Q & M Dental to acquire Foo & Associates for S$5.5m

Same profit guarantee within ten years.

The Board of Directors of Q & M Dental Group (Singapore) Limited announced that it had on 17 March 2014 entered into a Share Purchase Agreement with Dr Foo Mooh Thong to acquire 100% of the shareholding in Foo & Associates Pte Ltd owned by the Vendor and located at 290 Orchard Road, #09-03, Singapore 238859 (F&A).

Pursuant to the Agreement, the Company will purchase 100% of the issued and paid-up share capital of F&A (Sale Shares) from the Vendor for a total consideration of S$5.5 million (Purchase Consideration).

The Purchase Consideration shall be paid by the allotment of the Company’s shares (Consideration Shares) to the Vendor. The Consideration Shares shall be allotted at 90% of the weighted average price of the Company’s shares traded on SGX for the full market day on the date on which the Agreement is signed, i.e. on Monday, 17 March 2014.

The Purchase Consideration was arrived at after negotiations on a willing-buyer, willing-seller basis. In arriving at the Purchase Consideration, the Company has taken into account, inter alia, current market conditions, the prospects of F&A and the strategic merits of the acquisition.

The Vendor guarantees that for the 10 year period commencing on 1 January 20141. The annual profit guarantee shall not be less than S$525,000, or the aggregate accumulated profit for all the profit guarantee years within the 10 year period shall be equivalent to the sum of S$5.25 million. The Profit Guarantee shall be satisfied by either (a) or (b), whichever is the earlier, the board said.

The board is of the view that the Profit Guarantee from the Vendor would be beneficial to the Company and in accepting the Profit Guarantee took into consideration three factors. First is the prime location in which F&A is located in. Second, the expertise of Dr Foo Mooh Thong, a well-known and well-respected specialist in the prosthodontic field of dentistry. And third, the large and established patient base accumulated over the past 14 years of operation, including a significant amount of foreign patients from the dental tourism pool in Singapore.