THOMSON Medical Group is proposing to fully acquire Far East Medical Vietnam (FEMV), the owner and operator of a range of healthcare facilities in Vietnam, including FV Hospital.

 

The Singapore-based healthcare company, which owns and operates Thomson Medical Centre and is backed by tycoon Peter Lim, on Wednesday (Jul 12) said it planned to acquire 100 per cent of FEMV at a consideration of up to US$381.4 million.

 

The amount comprises an initial consideration of US$359.6 million in cash, together with an additional earn-out consideration of US$21.8 million, should the target company achieve a FY2023 adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) of over US$24.5 million.

 

Based on FEMV&rsquo s audited financial statements for the financial year ended December 2022, the target&rsquo s net revenue stands at 1.9 trillion dong (S$110.1 million), while its Ebitda amounts to 463.7 billion dong.

 

Assuming that the total consideration including the maximum earn-out consideration is paid, this is estimated to translate to an enterprise value-to-Ebitda multiple of 13.5 times.

 

Thomson Medical said its proposed acquisition &ndash which is subject to shareholder approval as well as clearance from Vietnam&rsquo s regulatory authorities &ndash is in line with the group&rsquo s objective to grow its pan-Asian footprint.

 

Acquiring FEMV would allow the group to enter Vietnam&rsquo s growing private healthcare market and diversify its presence across markets.

 

The transaction is estimated to increase the group&rsquo s FY2022 pro-forma revenue by 33 per cent and Ebitda by 24 per cent.

 

The total consideration represents about 32 per cent of Thomson Medical&rsquo s S$1.6 billion market capitalisation as at end-Jun 11.

 

Aside from FV Hospital, FEMV owns the facilities of FV Saigon Clinic in addition to a chain of clinics under its subsidiary American Chiropractic Clinic, along with a planned pharmacy facility at FV Hospital.

 

News of Thomson Medical&rsquo s proposed acquisition comes after various media outlets reported that it was looking to acquire a controlling stake in FV Hospital.

 

Responding to these reports, the company on Jun 8 said that it was in preliminary confidential discussions to &ldquo explore a potential transaction&rdquo , although no definitive terms had been agreed upon as at the time of its Jun 8 filing.