TTC Acquires an Additional Clinic
Sydney, Dec 13, 2016 AEST (ABN Newswire) - Traditional Therapy Clinics Limited (
ASX:TTC) through its wholly owned subsidiary, Fuqiao (Chongqing) Holdings Co. Limited, has entered into a contract to acquire an additional clinic from its franchised clinic base in line with a key element of the business strategy which is to grow its owned clinic network and increase revenues and profit. The signing of the contract to acquire the new clinic located in the city of Yulin in Guangxi Province takes the number of clinics acquired by TTC since listing on the ASX in September 2015, to 14 and the total number of owned clinics to 25. This clinic will be TTC's 7th self-owned clinic in Guangxi. As previously advised, TTC had signed 38 new franchise agreements for the period from 1 January 2016 to 12 Dec 2016. TTC is also in the final stages of due diligence and negotiation for the acquisition of another clinic.
The purchase price for the new clinic will be paid in cash by TTC and totals RMB 7.2 million which equates to AUD 1.40 million at an exchange rate of 5.15(AUD:RMB). The total purchase price represents an average EBITDA multiple of 3.5 based on the clinic's earnings in the 2016 financial year.
TTC is focused on building on its established market position and expanding its owned clinic network in key strategic areas of its business coverage. Settlement of the acquisition is expected to be completed during Jan 2017. The total number of franchised and owned clinics and new franchise licences granted and clinics acquired by TTC during 2015 and 2016 calendar years is shown in Table 1 (refer to link below).
TTC's Growth Strategy
TTC's multi-pronged growth strategy includes focusing on:
- Growing its number of franchised clinics; and
- Expanding its owned clinic network through the acquisition of existing clinics (from third parties or franchisees) or developing greenfield owned clinics in suitable locations.
The "owned clinic" model is one key focus of the company given the ability to generate a greater return on investment and its added advantage of assisting with projecting TTC's brand and further demonstrating the high standards of quality and service within the TTC network.
To view tables and figures, please visit:
http://abnnewswire.net/lnk/CMG516N0
About Traditional Therapy Clinics Ltd
Traditional Therapy Clinics Limited (ASX:TTC) is a franchisor and the owner of one of the largest chains (by number of clinics) of traditional therapeutic health and wellness clinics in China. It currently has 343 franchised clinics and 35 owned clinics in operation. It is a well established business with a strong growth profile, employing a repeatable and scalable business model.
TTC has a highly recognised and respected brand, having received the prestigious Chinese Well-Known Trademark designation from the State Administration for Industry and Commerce. It operates within a strongly regulated industry sector of significant scale, which offers opportunity for further growth.
TTC is an ASX listed company employing around 1,000 staff across 27 of the 33 administrative divisions in China. More information is available at https://www.ttc-ltd.com/
| ||
|
