Perth, Australia and Kuala Lumpur, Malaysia: September 9, 2008: Solbec Pharmaceuticals Ltd (ASX: SBP) is pleased to announce that the Company has today executed an Option Agreement for the acquisition of VISTA Laser Eye Center Sdn Bhd (‘VISTA’), a key profitable and cashflow positive Southeast Asian Eye Care Business trading under the name of VISTA Vision Specialist www.vista.com.my.
VISTA, which owns two best-practices clinics and a number of current and planned clinics specializes in cataract and refractive eye surgery and is expanding into retinal disease markets serving Malaysia, neighbouring countries and the highly attractive destination medical tourist segment. Destination medical tourists comprise an increasing percentage of eye care surgical revenue at VISTA, and in 2007 VISTA achieved the Special Achievement Award from the Malaysian Ministry of Tourism in this regard. It also received the Best LASIK center award in 2006.
VISTA utilises the latest eye lasers and cataract technology, including the iLasik technology used by the National Aeronautics and Space Administration (NASA) (www.amo-ilasik.com) and the US Department of Defense. In the cataract surgery arena, for the last two consecutive years VISTA has received an award as the clinic that implants the most ReSTOR Multifocal lenses in Malaysia by Alcon, one of the largest ophthalmic companies in the world (www.alcon.com). Cataract Multifocal Surgery is now considered the fastest growing segment of cataract surgery.
Solbec Pharmaceuticals will also propose to its Annual General Meeting of Shareholders to have the eye care strategic business unit trade under the brand name Freedom Vision Australasia™.
Dr William Ardrey, Solbec’s Chairman, commented “The VISTA acquisition is in keeping with Solbec’s ethical mission of offering the latest and most relevant treatments to patients. At the same time, the transition offers the additional commercial benefits to shareholders of integrating a cash generating business which can be aggressively expanded into a best-practices eye surgery powerhouse for the Australasian region.”
Mr Boon Siong Lim, VISTA’s CEO, commented “VISTA can use this partnership with Solbec to grow within Malaysia and also to anchor expansion into fast-growing eye surgery markets in neighbouring countries.” Mr Boon Siong Lim has been invited to join the Board of Directors of Solbec upon completion of the transaction, to assist in anchoring the regional expansion plans.
About the Transaction:
The Option Agreement provides Solbec an exclusive right to purchase VISTA on pre-agreed terms and metrics. The business acquisition will also be subject to requisite shareholder and ASX regulatory approvals. The Company has 120 days to effect the transaction. Around the Christmas period, the transaction is expected to be finalized, with significant initial payments made in consideration to VISTA.
“I am very excited about the prospect of re-lunching Solbec and the move away from drug development into the lucrative multicentre ambulatory day surgery space. Our initial acquisition is cash flow positive from the outset and we have plans to rapidly expand the business regionally” commented Dr Ardrey.
The VISTA management team together with its team of world class surgeons will be retained in the transaction. Dr David Sparling, General Manager of Solbec added “Mr Boon Siong Lim is an award-winning entrepreneur and passionate champion of a patient-first focus, supported by a strong team that has successfully grown the business to a recognized regional powerhouse. By working together we can accelerate share value enhancement while offering the highest quality outcomes for our patients.”
The Solbec business, likely trading under the Freedom Vision brand name, will continue to be supported by Dr David Sparling, as GM, and the Board comprising Mr Russell Barnett, Dr John Papadimitriou, and Mr Grant Bennett.
Dr William Ardrey will continue as Chairman. Dr Ardrey has extensive executive experience running successful, multicenter international day surgery and eye care groups in the region, and presents regularly on practice management and eye care technologies at the Royal Australian New Zealand College of Ophthalmology, American Society of Cataract & Refractive Surgeons, International Society of Refractive Surgeons, and regional practice manager seminars on marketing. He has been recognized by PWC, Business News, Google and others as a top management and marketing expert in the health care and eye surgery markets and currently advises a number of successful practices in Australia, concurrent to publishing on new eye care technology in the American Journal of Ophthalmology, Journal of Cataract & Refractive Surgery, and others.
Mr Boon Siong Lim has won numerous entrepreneurial awards including being the Top Nominee from Ernst & Young Entrepreneur of the Year Award 2003. He has been a committee member of the prestigious Entrepreneurs Organization Malaysia Chapter (www.eonetwork.org) for the past several years and will be the incoming president 2009-2010.
Australasian Ambulatory Surgery Center Markets and VISTA:
Globally, the refractive (largely LASIK or laser eye surgery) market comprises almost 300 million eligible patients, and the demographics of aging populations create large addressable markets for cataract and retinal surgery. Some of the fastest growing refractive markets are in countries like Malaysia, Philippines, Singapore, Vietnam and Indonesia, while Australia and New Zealand have also seen steady growth in these segments. Such procedures are performed in day surgery and specialty office environments, and ophthalmology is recognized as a high-value and scalable surgery segment. The doctors at VISTA are recognized regional leaders in advanced eye surgery techniques and present regularly at major international conferences.
VISTA surgeons employ the latest, proven technology to provide the best possible patient results. The iLasik platform is used by the United States NASA space agency and the US Department of Defense. ReSTOR Multifocal the latest multifocal lens technology for cataract surgery, and other advanced techniques are all employed at VISTA’s Kuala Lumpur centre, which has won Best Lasik Center Awards, Enterprise of the Year, Business of the Year, and Emerging Brand awards over the past few years.
VISTA has performed over 20,000 surgical procedures with its team of certified, full time surgeons. Multicentre ambulatory day surgeries are among the most attractive investment opportunities in Southeast Asian health care. The combination of aging populations and dietary change creates a large demand for high-quality outpatient care. Well managed and fast growing assets in the ophthalmology space are especially attractive. Corporate players can add significant value to the high volume surgical segments of this market, such as cataract surgery, refractive surgery, corneal surgery, Lasik and laser eye surgery and related surgical indications; the scalability, free cash flow, growth opportunities and economies of scale which can be achieved from this are compelling.
Integration of VISTA and Further Expansion:
It is the intention of the Board that Solbec will re-launch and re-brand the Company as a major force in the highly profitable market of eye care day surgery in the Australasian region, with this acquisition being the first in a series of similar transactions. According to Mr Russell Barnett, a company Director, “Solbec wanted to retain a health care and ethical patient-first focus, at the same time acquiring revenue share in rapidly expanding regional healthcare markets in conjunction with a trusted and recognized partner. The relationship with VISTA means we can expand the business in diagnosing and treating patients in the fast growing cataract and refractive fee-paying day surgery markets, in Southeast Asia.”
The Company intends to grow primarily through acquisition and integration of key cataract and refractive surgery and laser vision correction practices in Malaysia, and neighbouring markets, earning a return for shareholders both through operating profits, and via seeking a near term harvest of value after initial practices are acquired, integrated and an optimized. A branded multicentre presence can be presented as a highly attractive cash-generating investment opportunity to larger players. The Company has also been approached by other acquisition opportunities, and will report to shareholders as these discussions progress.
Further information on the corporate re-launch will be provided shortly.
Dr William Ardrey Dr David Sparling
Chairman General Manager
Tel: (08) 9355 0399 Tel: (08) 9355 0399
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