ComfortDelGro Corporation, a Singapore-based transport operator, is reportedly set to acquire 90% of Ming Chuan Transportation through a S$8.6 million ($6.3 million) deal after entering a sale and purchase contract with Ng Chew Chuan and Neo Lay Kim.
According to reports, ComfortDelGro would be making the acquisition through its subsidiary, ComfortDelGro MedCare; more commonly referred to as CDG MedCare.
Ming Chuan Transportation offers wheelchair-friendly transportation services for those with limited mobility and has a fleet of 76 specialized vehicles.
ComfortDelGro stated that through the acquisition, CDG MedCare will be able to further expand its specialized medical escort and transport services, which are specifically catered towards the elderly as well as people with mobility needs.
Upon completion, CDG MedCare’s fleet will consist of 92 vehicles, becoming Singapore’s largest wheelchair transport service provider, claims the company.
Lim Tien Hock, CEO of CDG MedCare, stated that the acquisition opportunity arrives at a time where there is a growing demand for transportation services from mobility-impaired passengers and senior citizens, fueled in-part by the Covid-19 pandemic.
Lim added that the company is confident that it can reach out to more passengers with the new acquisition and that the company would be able to serve these customers better with its dedicated and trained staff.
The transaction, expected to complete on January 24th, as per ComfortDelGro, will grant 90% stake to CDG MedCare, with Neo holding 10% of Ming Chuan Transportation’s total, issued capital, becoming an indirect subsidiary of ComfortDelGro.
While the transaction's total consideration payable will be around S$8.5 million ($6.2 million), only S$8 million ($5.9 million) of it will be payable on completion. The balance consideration is to be paid to both Neo and Ng at the expiry of a 12-month period starting from the completion of the deal.
The consideration would be fully satisfied in cash and would be funded with the help of internal resources.
The consideration, which was reached upon a willing-buyer and willing-seller basis after taking Ming Chuan Transportation’s net book value and assets, will be subject to a condition that there are no claims against Neo and NG at the time of expiry, CDG added.