KUALA LUMPUR: ACE Market-bound Metro Healthcare Bhd
will be looking to acquire an existing maternity hospital in the Klang Valley as part of its plans to expand its obstetrics and gynaecology (O&G) segment.
The healthcare service provider, which is transferring its listing from the LEAP Market to the ACE Market of Bursa Malaysia, will utilise the bulk of its listing proceeds for the acquisition.
Metro Healthcare said in its prospectus that it has identified the maternity hospital it intends to acquire and is in preliminary discussions to negotiate the purchase consideration.
According to Metro Healthcare executive vice-chairman Dr Tay Swi Peng @ Tee Swi Peng, 15% of women globally, including in Malaysia, may require fertility services and of this figure, 3% would require in vitro fertilisation (IVF) treatment.
He said the number of patients is not expected to decrease despite the country’s declining birth rates, adding that a large portion of patients seeking fertility treatments are above 35 years old.
“There is a group that chooses not to have children at all, but that is not of concern to us. We see fewer patients coming in from younger age groups and instead there is a growing number of patients who are seeking fertility treatments later on in life.
“These older patients require a lot more additional treatments. Hence, while the number of patients may be lower, each patient would be undergoing more extensive treatments,” he said during the prospectus launch for the fertility-care provider yesterday.
Currently, IVF treatment contributes about half of the group’s revenue while the other half is from other services, which include obstetrics and gynaecology.
Metro Healthcare is also looking to expand its network to seven IVF centres by 2025, with new locations in Ipoh and Kelantan.
While there are no concrete plans yet, Tay said that the group is also looking to expand overseas should the opportunity arise.
“We have a competitive edge in this regard because we speak the same language if we go to China or Indonesia. We see a vast opportunity in countries like Indonesia, China, the Philippines and Myanmar,” he said.
About 90% of the group’s clients are locals, while foreign patients make up less than 10%.
Going forward, Tay said he plans to grow the business vertically other than expanding horizontally.
“This means that we will focus on having more specialists and embryologists in each centre and we will heavily market ourselves in the surrounding area of the centres.
“This will bring in more patients for each centre. The revenue for each IVF lab is not very big now. Hence we can easily double our volume,” he said.
The group expects to raise RM39.2mil from the initial public offering (IPO) and plans to use RM25mil (63.85%) for expansion of its existing O&G segment.
A further RM3mil (7.66%) of the proceeds will be used for the refurbishment and upgrading of its facilities.
Another RM7.3mil (18.72%) will be set aside for working capital.
The remainder of the proceeds will be used to defray the estimated listing expenses of RM3.8mil (9.77%).
Metro Healthcare’s IPO entails a public issue of 156.6 million new shares at an offer price of 25 sen per share.
Some 24.5 million shares will be made available to the Malaysian public while 9.8 million shares will be offered to its eligible directors, employees and individuals who have made contributions to its success.
A total of 122.4 million shares will be sold to bumiputra investors who have received approval from the International Trade and Industry Ministry through private placements.
There is no offer for sale of shares.
With an enlarged share capital of 978.9 million shares, Metro Healthcare will have a market capitalisation of RM244.7mil upon listing on the ACE Market of Bursa Malaysia on Nov 15.
MIDF Amanah Investment Bank Bhd is the principal adviser, sponsor, underwriter and placement agent for the IPO exercise.
