PRESS RELEASE
CORDLIFE RAISES ITS INTEREST IN MALAYSIA
LISTED CORD BLOOD BANKING SERVICE
PROVIDER STEMLIFE BERHAD TO 31.81%
- Acquisition of additional 11.89% interest for aggregate consideration
of RM17.66 million
- Transaction to expand the Group’s Asian presence
- Leveraging on economies of scale and scope as a multi-product
healthcare company catering to the mother and child segment
Singapore, 9 December 2013 – Cordlife Group Limited (“Cordlife”, and together with its subsidiaries, the “Group”), an aspiring multi-product healthcare company catering to the mother and child segment, announced that it has acquired a further 11.89% interest (“Additional Acquisition”) in StemLife Berhad (“StemLife”), an associated company of Cordlife which is listed on the ACE Market of Bursa Malaysia, for a cash payment of approximately RM17.66 million (“Consideration”). Following the Additional Acquisition, Cordlife will hold approximately 31.81% of the issued and paid-up share capital in StemLife. The Consideration for the Additional Acquisition was satisfied by the Group fully
in cash funded through a combination of borrowings and IPO proceeds.
Prior to this, the Group announced on 4 October 2013 that it had completed the
acquisition of an initial 19.92% interest in StemLife (“Initial Acquisition”).
Mr Jeremy Yee, Executive Director and Chief Executive Officer of Cordlife said, “Malaysia will be one of our key markets going forward. With our acquisition of the additional stake in StemLife, we are well-positioned to further benefit from the tremendous growth opportunities in Malaysia driven by rising affluence and greater health awareness. Cordlife and StemLife have identified many potential synergies between our businesses such as economies of scale and scope in all of StemLife's service/product offerings in Malaysia and potential collaborations with StemLife to offer StemLife's services and products to the Group’s existing markets. As amongst the market leaders in Singapore, Indonesia, Philippines, Hong Kong and India, we believe that the increased stake in StemLife presents Cordlife with the opportunity to further cement its leading position in Asia, and particularly the ASEAN region.”
Valuation and Financial Impact
The Consideration of RM17.66 million for the Additional Acquisition was arrived at after negotiation on an arm's length basis and on a willing-buyer willing-seller basis taking into account, amongst other factors, the aggregate net tangible asset value of StemLife of approximately RM33.17 million as at 30 September 2013. The Consideration is based on an agreed price of RM0.60 per StemLife share, being the same agreed price per StemLife share for the Initial Acquisition.
Based on the unaudited condensed consolidated financial statements of the StemLife group for the third quarter and nine months ended 30 September 2013 as announced by StemLife on 28 November 2013, StemLife has a cash balance of RM73.74 million and a deferred income from operations of RM58.69 million. StemLife generated cash from operating activities of RM6.52 million for the third quarter ended 30 September 2013.
For more information on the Additional Acquisition, Cordlife's shareholders may refer to the announcement made by Cordlife on 9 December 2013 and released on the SGXNET.
Mr Yee continued: “Cordlife is currently benefitting from economies of scale and scope as a multi-product healthcare company, with new products in the pipeline catering to the mother and child segment, on top of its existing core businesses in cord blood banking and umbilical cord tissue banking. The Additional Acquisition will enlarge the Group’s geographical footprint in Asia and allow us to tap into the growth story of emerging Asian nations as part of our economies of scale strategy. With respect to economies of scope, the Group could potentially work with StemLife to cross-sell services and products in Malaysia and Thailand with the increased stake in StemLife. ”
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