C-MER Eye Care (03309) to Acquire Medical Practice and Assets for Up to HK$26.745 Million to Build a Cohesive and Integrated Healthcare Network

C-MER Medical(03309) announced that on August 28, 2020, its wholly-owned subsidiary, Hong Kong International Ophthalmic Medical, proposed to acquire the practice business and assets from Zhang Mingquan, with the maximum consideration for the acquisition being HK$26.745 million.

Of which, HK$15.281 million in cash will be settled using the Group’s internal financial resources within five business days after completion; HK$11.364 million will be settled by the Company allotting and issuing approximately 1.8523 million consideration shares to the Seller at a price of approximately HK$6.135 per consideration share within ten business days after completion; and up to HK$100,000 will be used to acquire the drugs held in the clinic premises as at the close of business on the completion date, which shall be reimbursed based on the original purchase cost to be separately agreed upon by the Buyer and the Seller after completion. The issue price of HK$6.135 per consideration share represents a premium of approximately 0.08% over the closing price on that day.

Assuming no change in the number of issued shares as of the date of this announcement, upon completion, the Seller will hold approximately 0.16% of the enlarged issued share capital of the Company after the allotment and issuance of the consideration shares.

It is understood that the medical practice is located at the clinic premises and provides ophthalmology specialist medical and related services in Central, Hong Kong. The seller is the sole proprietor of the medical practice. The seller is a registered medical practitioner with the Medical Council of Hong Kong and is listed on the General Practitioner Register. He/She is also listed on the Specialist Register in Ophthalmology with good standing.

As of March 31, 2020, the value of the assets to be acquired by the Buyer was approximately HK$208,500, primarily comprising medical equipment, furniture, and fixtures within the clinic premises.

The Directors are of the opinion that the Acquisition will enable the Group to fully leverage the advantages derived from acquiring the Seller’s professional talent, while also gaining access to the Seller’s patient base. This will complement the Group’s existing services and facilities, thereby enhancing its overall capability in serving existing clients and attracting new ones.

C-MER International Ophthalmology Healthcare has continued to achieve impressive results in ophthalmic services and generate recurring revenue. Taking into account the outstanding financial performance of C-MER International Ophthalmology Healthcare, which will contribute substantial profits to the Group, the acquisition of the practice business and the entry of the Seller as a partner of C-MER International Ophthalmology Healthcare (China) Limited and C-MER International Ophthalmology Healthcare have brought significant opportunities for the Company to further expand its market share and better leverage the Group’s surgical centers and the Group’sC-MER MedicalPersonnel Team. The acquisition will enable the Group to diversify its revenue streams and utilize financial resources efficiently.

Having considered the above reasons, the Directors are of the opinion that the Purchase Agreement aligns with the Group’s overall business direction. Upon completion, the Group will continue to collaborate with healthcare professionals, focusing on medical services and drug development to build a coherent and highly integrated healthcare service network.