Hyphens Pharma International has, on Nov 9, proposed to acquire the Novem group of companies for a total consideration of $16.28 million.
The group’s wholly-owned subsidiary, Hyphens Pharma Pte Ltd (HPPL) entered into a sale and purchase agreement (SPA) with Ng Kian Peng Albert and Lau Jui Fang for the acquisition of 100% of the issued and paid-up shares in Novem Healthcare, Novem Pharma and Novem Sciences.
Of the consideration amount, 85% – or $13.8 million – will be paid in cash and split equally between Ng and Lau.
The remaining 15% will be paid via the allotment and issuance of 8.34 million new shares in the capital of Hyphens Pharma International at an issue price of 29.26 cents. The shares will also be split equally between Ng and Lau. The value of the shares is estimated to be at $2.44 million.
Ng is the founder of the Novem group. He is a registered pharmacist with over 20 years of industry experience in the distribution, sales and marketing of healthcare products.
As part of the proposed acquisition, Ng will be appointed as managing director and director of each of the target companies.
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He will thus continue to oversee and management the companies’ operations even after the completion of the acquisition.
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Novem is a leading Singapore-based healthcare-focused distributor of pharmaceutical and nutraceutical products, as well as medical devices.
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The group represents over 40 brand principals mainly across Europe and Asia. It serves over 1,000 customers such as hospitals, polyclinics, specialists and general practitioners. It offers over 150 products including a proprietary brand of generics and in-house developed nutraceutical products.
Novem Sciences holds a 45% stake in Ardence Pharma, an associated company incorporated in Malaysia. The other 55% stake in Ardence Pharma is held by IREG Solution.
Once the acquisition is completed, the Novem group will become wholly-owned subsidiaries of HPPL.
According to Hyphens Pharma Limited, the consideration also determined the EBITDA of the Novem group for the FY2019 and FY2020 ended December on a cash-free and debt-free basis.
The proposed acquisition was a “strategic opportunity” for Hyphens Pharma Limited to acquire a portfolio of businesses that is “financially attractive” from a revenue scale and earnings accretion perspective. The Novem group comes with a good management team as well, read the filing posted on SGX.
On the acquisition, Novem’s founder and managing director Ng says, “We look forward to being a part of Hyphens Pharma, the leading specialty pharmaceutical and consumer healthcare group in Singapore. Being part of the group, Novem will be able to leverage on Hyphens’ strength in the private sector to accelerate our growth in Singapore and capitalise on new opportunities.”
“Besides being earnings accretive, the acquisition of Novem will help to cement our market leadership in Singapore and expand our product portfolio, while giving us access to new principals, market segments, and customers like the restructured hospitals. Our proprietary brands business segment will also get a boost with the addition of Novem’s proprietary products and we expect to accelerate our growth as we reap revenue synergies with them,” says Lim See Wah, executive chairman and CEO of Hyphens Pharma.
Shares in Hyphens Pharma last closed at 29 cents on Nov 8, before its trading halt before market open on Nov 9.
Photo: Hyphens Pharma
