PETALING JAYA: PRG Holdings Bhd has aborted the proposed RM18.3 million acquisition of Roopi Medical Centre Sdn Bhd, but announced a plan to acquire a confinement service firm for RM5.35 million.
PRG said the termination came after the group and the vendors had mutually agreed to not extend the deadline to fulfil conditions of the agreements related to the purchase, according to its filing with the stock exchange.
With the deal now falling through, PRG said the vendors, namely Datuk Dr Roopi, Charanjeet and Linecom Corp Sdn Bhd will have to refund the deposit paid within 14 days.
In a separate filing, PRG announced that its wholly owned subdiary PRG Healthcare Sdn Bhd is acquiring 41.2% of Esther Postpartum Care Sdn Bhd (EPC) for RM5.35 million.
PRG also entered into a call option agreement for an additional 13.33% stake in EPC for RM2 million.
EPC, which provides confinement service in Malaysia based on Taiwanese postpartum concept, recorded a net loss of RM326,961 for the financial year ended 2016.
The vendors agreed to guarantee a profit before tax of not less than RM5.5 million for a period of two-and-a-half years.
PRG said the investment into EPC is part of the group’s vertical integration along the value chain in the wellness segment of the healthcare industry which is thriving and has opportunity for growth.
“The board believes that the investment into EPC is an attractive business proposition and is expected to diversify the stream of income of the group.”
PRG's shares fell 1.21% to close at 82 sen with 14,000 shares done.