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Rowsley Limited Set To Become One Of Raffles Medical Group Ltd’s Competitors Soon

Rowsley Limited (SGX: A50), a real estate company with businesses in design and engineering, real estate development and hospitality, made public that it plans to set foot into the healthcare sector.

This will be done by purchasing a 100% stake in Thomson Medical Pte Ltd and a 70.36% stake in TMC Life Sciences Berhad (0101.KL), a company listed in Malaysia. These assets are currently owned by billionaire, Peter Lim. As at 16 March 2017, he owned close to 46% of Rowsley.

The proposed acquisition, which is valued at up to S$1.9 billion, is going to be an all-share deal and will be financed through the issuance of new shares of Rowsley at S$0.075 per share. This translates to a creation of 25.3 billion new shares. A Sales and Purchase Agreement is expected to be completed within two months.

Rowsley added that the “proposed acquisition will also bring TMCLS’s proposed Thomson Iskandar project in Iskandar, Johor, together with Rowsley’s investment in Vantage Bay Healthcare City”. Thomson Iskandar is an integrated development that comprises of a general hospital, medical suites and a retail mall.

Mr Ng Ser Miang, Rowsley’s Chairman said:

“This proposed acquisition is an opportunity for us to acquire controlling stakes in two established healthcare assets in Singapore and Malaysia and be part of an expanding business. Healthcare is a big and growing market due to aging demographics, longer lifespan, major trends to increase birth rates, and growing affluence. This deal will diversify Rowsley’s portfolio as well as strengthen our current businesses. It will also significantly increase Rowsley’s market capitalisation, market profile, and generate investor interest.”

Upon completion of the deal, the firm plans to issue two bonus warrants for every one existing share owned by a shareholder and an additional warrant (known as piggyback warrant) for every bonus warrant that is exercised. Each bonus warrant will have an exercise price of S$0.09 per share while each piggyback warrant will have an exercise price of S$0.12 per share.

Market watchers will remember that back in 2010, Mr Lim privatised Thomson Medical Centre, which was a listed company here, for S$513 million. Seven years later, the medical practice is going to return to the market. Rowsley said that it “may also consider changing its name to incorporate the word “Thomson” after completion” of the deal.

Currently, Rowsley’s outstanding shares is 4.74 billion. With a current price of S$0.117, the market capitalisation is S$554.4 million. As a comparison, the largest private medical group practice in Singapore, Raffles Medical Group Ltd. (SGX: BSL), has a market cap of S$2.28 billion.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.The Motley Fool Singapore has recommended shares of Raffles Medical Group. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.