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Dallah signs SAR 750 mln contract to acquire Bagedo & Dr. Erfan Hospital

Dallah signs SAR 750 mln contract to acquire Bagedo & Dr. Erfan Hospital
DALLAH HEALTH
4004
-0.38% 156.40 -0.60
Dallah Healthcare said it signed an agreement on Sept. 30 with Bagedo Trading Holding Co. and Mohamed Ahmed Erfan & Sons Holding to fully acquire Bagedo & Dr. Erfan General Hospital Co. at a total value of SAR 750,000,000.
As a consideration for the acquisition of the sellers' shares in the target, Dallah will issue 7,471,980 new shares to the sellers representing 15.83% and 13.67% of Dallah's entire issued share capital before and after the capital increase respectively, in addition to a cash consideration of SAR 150 million which will be financed through Dallah's internal cash flow and representing 20% of the total consideration amount for the transaction.
As a result, this will increase Dallah’s total number of shares in issue from 47,200,000 shares to 54,671,980 shares post capital increase. The number of new shares in Dallah to be issued has been determined using a 60-day volume weighted average share price (VWAP) of SAR 80.30 as of the end of the trading day of Dallah's shares on the Saudi Stock Exchange (Tadawul) on March 25, 2014.
The market Value of Dallah is estimated at SAR 5883 million.
After the completion of the transaction, the combined shareholding of the sellers in Dallah will be 13.67% and Dallah's shareholding in the target will be 100% of its capital.
The acquired shares of the target shall be registered in the name of Dallah and one of its wholly-owned subsidiaries.
The following should be noted in respect of the Share Purchase Agreement:
1- The Share Purchase Agreement ends upon completing its conditions on or before March 31, 2015. Dallah may terminate the share purchase agreement if any of the sellers breaches any of their obligations and/or warranties pursuant to the share purchase agreement. 2- There are no related-parties and/or any information or material terms that may influence the price of the share.
3- The transaction is subject to obtaining (a) the consent of all the official concerned parties including the Capital Market Authority, Ministry of Commerce and Industry and the Ministry of Health; (b) the approval of Dallah Health's extraordinary general meeting to raise its capital to issue new shares to the Sellers as consideration for obtaining their shares in the Target; and (c) the satisfaction of certain legal and commercial conditions agreed between the parties.
It is also worth mentioning that the target which has a current paid up capital of SAR 50,000,000, owns the Bagedo & Dr. Erfan General Hospital established in 1981 in Jeddah and has 326 beds and renders comprehensive healthcare services to its patients in addition to other advanced ancillary facilities.
The target achieved revenues of SAR 491.9 million, SAR 502.6 million and SAR 460.4 million in the years 2011, 2012 and 2013, respectively.
Dallah Health will start consolidating the financial statements of the target starting from the date the Transaction closes.
The Transaction falls within Dallah's strategic goals, whereby it aspires to expand its operations, increase its profits and improve its financial results.