Q&M Dental Group to Acquire Veritas Dental Clinic in Bukit Timah

SINGAPORE: Q&M Dental Group (Singapore) has announced its intention to acquire the dental clinic business of Veritas Dental for S$800,000, according to a report published on the Straits Times website. The company stated that this proposed acquisition aligns with their ongoing strategy to expand their primary dental operations in Singapore.

Veritas Dental, a Singapore-incorporated company, currently operates a dental clinic at 781 Bukit Timah Road. The binding memorandum of understanding (MOU) for the acquisition was signed on September 11, 2024.

Ownership and Valuation

As of the announcement date, Dr Sebrina Abdul Malik owns 90% of Veritas Dental’s total issued and paid-up share capital. The Straits Times report indicates that for the fiscal year ending December 31, 2023, Veritas’ net book value of assets stood at S$203,486.

Q&M Dental Group explained that the S$800,000 purchase price took into account various factors. The company stated:

“The purchase consideration of $800,000 took into account several factors. These include the current market conditions, history, track record and future prospects of the business, as well as Dr Sebrina’s professional expertise, and strategic merits of the proposed deal.”

Financial Arrangements and Guarantees

As part of the acquisition process, Q&M has already provided an advance deposit of S$125,000 to Veritas on September 10, 2024. This deposit will be counted as part of the overall purchase consideration.

The agreement includes performance guarantees from Veritas and Dr Sebrina. Specifically, the consolidated net profit after tax (NPAT) of the acquired business must meet certain targets. For example, the guaranteed NPAT for the period from September 1, 2024, to December 31, 2026, is set at S$257,973. The long-term target is even more ambitious, with the guaranteed NPAT expected to reach S$1 million by the end of August 2032.

Future Commitments

Upon completion of the acquisition, Dr Sebrina Abdul Malik will enter into a service agreement with Q&M Dental Group. This agreement will include non-compete and non-solicitation clauses and is set to remain in effect for a minimum of 10 years.

Financial Outlook

Q&M Dental Group does not anticipate that this acquisition will significantly impact its net tangible assets per share or earnings per share for the fiscal year ending December 31, 2024. This statement comes in the context of the company’s strong financial performance earlier in the year. In August, Q&M reported a net profit of S$9.8 million for the first half of 2024, representing an 84% increase from the S$5.3 million recorded in the same period the previous year.

Despite this positive financial trajectory, the company remains focused on its core business strategies. As reported by the Straits Times, Q&M had previously stated:

“Despite the ‘solid performance’, it will remain focused on and committed to solidifying the fundamentals of the group, including expanding its network and adopting innovative technologies.”

This acquisition of Veritas Dental appears to be a concrete step in that direction, reinforcing Q&M Dental Group’s commitment to growth and innovation in Singapore’s dental care sector.