KLSE main board company TH Group Bhd (THG), which is into plantations, contracting services and information technology-related investments, will move into a fourth core business, healthcare, with the acquisition of the Nilai Cancer Institute (NCI), the first private oncology hospital in Malaysia.
THG will acquire a 90.57% equity stake in Asiaprise Biotech Sdn Bhd, which owns the NCI, for RM38.95mil, to be paid in part by cash (RM6.35mil) and the rest through the issuance of 29.64mil new TH Group shares at a five-day weighted average price of RM1.10 each. The agreement for the remaining 9.43% equity interest in Asiaprise will be signed later.
Although THG has been involved in life sciences for over two years, it has been as an investor, not owner, Dr Kim Tan, founder of ABSB, told reporters after signing the conditional sale and purchase agreement with THG in Kuala Lumpur yesterday.
The healthcare industry in Malaysia, valued at RM900mil, is expected to grow to RM1.2bil by 2006, while revenue from health tourism to rise to RM390mil this year and to RM2bil in 2007.
THG group managing director Lei Lin Thai said THG's move into the healthcare sector was after carefully planned and was synergistic with the group's investments in the technology sector.
He added that returns could only be expected after five years, common for the life sciences industry.
The NCI, set up in 1998 with an initial investment of RM20mil, would see RM28mil expected to be a mix of equity and debt pumped in as part of its expansion plan, Tan said. He added that the research and treatment-based hospital was operating almost at maximum capacity.
THG, which obtains around 50% of its revenue from its oil palm plantations, mainly in Sabah, also provides timber extraction services, its latest project being a 145,000ha land-clearing job in Kalimantan Timur, Indonesia, began early this year.
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