According to Zhitong Finance App, Neusoft Education (09616) issued an announcement. On March 26, 2024, the buyer (Neusoft Ruixin, a wholly-owned subsidiary of the company) signed a share transfer agreement with the seller (Neusoft Holdings) and the target company (Neusoft Healthcare). The buyer conditionally agreed to purchase all of the target company's shares, with a total consideration of RMB 81 million.

Considering that (1) Hospital A (Dalian Ruikang Cardiovascular Hospital) and Hospital B (Dalian Ruikang Zhuomei Dental Hospital Co., Ltd.) (Hospital A and Hospital B are each indirect wholly-owned subsidiaries of the target company) are mainly engaged in providing medical services; and (2) the company (as a foreign entity) must not directly or indirectly hold more than 70% of the shares in any medical institution in China. As part of the group restructuring, Kangdao Medical (1) entered into a funding agreement with Cardiovascular Management I, according to this, Kangdao Healthcare conditionally agreed to invest RMB in cardiovascular management in cash RMB 5.142,900; and (2) signed a joint investment agreement II with Shanghai. Based on this, Kangdao Medical conditionally agreed to co-invest RMB 21.4286 million in cash in Shanghai.

Following completion, 100% of the target company (along with its subsidiaries, excluding OPCO (“Cardiovascular Management, Shanghai Cooperation, Hospital A and Hospital B”)) will be held by the buyer, while 70% and 30% of each OPCO will be held by the buyer (directly or indirectly) and Kangdao Healthcare, respectively.

After completion, the buyer, Kangdao Medical and Ms. Zhang will then enter into a new contract agreement for 30% of OPCO's shares held by Condor Healthcare. As a result, OPCO will become an indirect wholly-owned subsidiary of the company, and all of OPCO's financial results will be incorporated into the Group's financial statements.

According to reports, the target company is a company registered in accordance with Chinese law on April 21, 2020. As of the date of this announcement, the target company is wholly owned by the seller. The target company is mainly engaged in business activities such as medical enterprise management, enterprise management consulting, medical equipment leasing, hospital management consulting, medical management, and medical technology research and development. As of December 31, 2023, the target group's net unaudited consolidated liabilities were approximately RMB 135 million.

According to the announcement, the acquisition became the cornerstone of the company's entry into the field of geriatric education. While developing the geriatric education business, the company expanded into the field of geriatric medical services, thus laying the foundation for the company to further expand the geriatric market. This strategic move will help the company unlock a second growth curve beyond its existing business and become an additional revenue stream that will help the company's overall business development and growth.

Hospital A under Target Group has established a deep cooperative relationship with the Second Affiliated Hospital of Dalian Medical University, which can provide patients with professional diagnosis and treatment services. Taking into account the current situation of high demand in the cardiovascular departments of Dalian's top three hospitals and the continuous improvement of hospital A's medical service capacity, hospital A will be able to effectively capture the diverse needs of cardiovascular related diagnosis and treatment in the market.

In addition, co-ordinated health insurance payments will support a wider range of dental treatment programs in Dalian starting in 2023. As a result, the market share of the dental treatment market in Dalian is gradually shifting from private dental clinics to dental hospitals above level 2 that can enjoy co-ordinated medical insurance payments. Therefore, as a second-level specialist dental hospital under the target group, Hospital B enjoys a reputation in Dalian for its excellent dental treatment capabilities, and is fully capable of seizing this market opportunity. The Board of Directors believes that the acquisition is in line with the company's expansion strategy and will help the Group establish diversified revenue streams and bring sustainable cash flow.

In addition, the acquisition will also help the company's current business reach a new level: the Group plans to establish medical and wellness courses, and the acquisition will facilitate the optimization of the Group's disciplines; hospitals and nursing homes under the target group will be used as training bases for students, providing practical training and internship opportunities, in line with the Group's TOPCARES integrated talent training model; and the acquisition will open up talent exchange channels so that hospital medical professionals can provide professional courses at the three universities, while the three universities can provide the target group with professionals with expertise in the fields of medical care, nursing and wellness.