Palette Multimedia to acquire 51% equity stake in Genopharma

PETALING JAYA: Palette Multimedia Bhd has signed a term sheet to acquire 51% equity stake in biomedicine and herbal medicine company Genopharma Sdn Bhd. 

Upon completion of the acquisition, Palette would issue new shares valued at RM1.53mil. The valuation is based on Genopharma’s price earnings (PE) ratio of 5 times of the financial year 2016 (FY16) net profit of RM600,000.

Palette has the call option for the remaining 49% with a valuation based on a PE ratio of 6 times of the net profit over the next three years with a profit guarantee in each year.

The call options after closing of FY17, FY18 and FY19 are 15%, 15%, and 19% of Genopharma’s total shares, with a profit guarantee of RM1mil, RM1.5mil and RM2mil respectively.

“We have invested years in developing the i-medic, a mobile healthcare platform for doctors and patients for conventional or western medicines. There is a strong demand for herbal based traditional Chinese medicine (TCM) treatment, especially for chronic diseases such as cancer and cardiovascular diseases.

“At the same time, patients want to see a measurement of progress in the treatment plan. Hence, we intend to digitise TCM and we will start with the digitisation of herbal medicine,” said Palette Multimedia Bhd chairman Eg Kah Yee after the signing ceremony yesterday.