Pihlajalinna Plc acquires Doctagon Ab through a directed share issue

Pihlajalinna Plc                         Stock exchange release                 12 March 2018 at 9:10

Pihlajalinna Plc acquires Doctagon Ab through a directed share issue

Pihlajalinna Plc has signed a share exchange agreement yesterday evening related to the acquisition of the Doctagon Ab’s entire share capital from its current owners. The M&A transaction will be realised through the issuance of Pihlajalinna’s new shares directed to Doctagon Ab’s owners. In the directed share issue, the entire Doctagon Ab’s transaction price EUR 30,105,000 is paid with Pihlajalinna Plc’s shares.

Doctagon is a Finnish healthcare service company that is growing strongly. Doctagon offers doctoral services for personal customers, occupational health services, personnel services as well as doctoral and consultation services for the public sector. Doctagon has strongly invested in digital services. It has two private clinics, in Helsinki and Turku.

”Doctagon is an excellent addition to Pihlajalinna’s operations. There is a strong evidence of the impact of the municipal responsible doctor model developed by the company. The model is a clear competitive advantage to Pihlajalinna and it creates significant potential to expand”, says Joni Aaltonen, CEO of Pihlajalinna. ”Furthermore, Doctagon is a prominent operator in bilingual municipalities.”

The revenue of the acquired business for the financial year that ended on 30 September 2017 was EUR 17.2 million (EUR 14.4 million in the previous financial year), EBITDA EUR 0.4 (0.1) million and operating profit EUR 0.3 (0.0) million. During the current financial year, Doctagon’s revenue and profitability have improved substantially from the previous financial year. The transaction has no impact on Pihlajalinna’s outlook for 2018 published in the financial statements release for 2017.

The directed share issue offered 2,006,989 new shares to be subscribed according to the purchase deed terms with a subscription price of EUR 15 per share. The number of shares to be issued corresponds to approximately ten per cent of all of Pihlajalinna Plc’s shares before issuing the new shares.

The new shares have been subscribed and their subscription price has been deemed to be paid, according to the purchase deed terms, with a contribution in kind of all of Doctagon Ab’s shares.

The decision to carry out the directed share issue is based on the share issue authorisation to the Board of Directors given by the Pihlajalinna Plc’s Annual General Meeting on 4 April 2017. The authorisation entitles the Board of Directors to resolve on the issuance of shares, option rights and other special rights conveying entitlement to shares as referred to in the Chapter 10, section 1 of the Limited Liability Companies Act. The Board of Directors has the right to deviate from the shareholders pre-emptive right to subscription (directed issue), provided that there is a weighty financial reason for the company to do so. The transaction is estimated to generate added value to the company and through it to its shareholders. Based on that, it was deemed that there was a weighty financial reason for the directed share issue.

The shares bestow their holders with shareholder rights starting from their registration date. The total number of Pihlajalinna Plc’s shares after the registration of the new shares is 22,620,135 shares.

Pihlajalinna Plc

Further information:
Joni Aaltonen, CEO, +358 40 524 7270
Ville Lehtonen, CFO, +358 40 759 7084

Nasdaq Helsinki
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Pihlajalinna in brief
Pihlajalinna is one of the leading private social and healthcare services providers in Finland. The company serves private individuals, businesses, insurance companies and public sector entities, such as municipalities and joint municipal authorities. In its private clinics and hospitals Pihlajalinna provides general practitioner services, specialised care, emergency and on-call services, a wide range of surgical services, occupational healthcare and dental care. In addition, the company offers innovative social and healthcare service provision models to public sector entities.