Zhongtong Financial APP News, jacobson pharma (02633) and jbm healthcare (02161) jointly announced that on November 11, 2024, Po Chai Herbal and PCHT (as sellers) entered into a sales agreement with ulferts (as buyer), Po Chai Herbal and PCHT conditionally agreed to sell 0.0565 million shares and 0.044 million shares of sales shares respectively, and ulferts conditionally agreed to acquire the relevant sales shares at a total price of 46.23 million Hong Kong dollars (i.e. 460 Hong Kong dollars per share of sales shares).

On the date of this joint announcement, Po Chai Herbal and PCHT are both indirect wholly-owned subsidiaries of jbm healthcare, while ulferts is an indirect wholly-owned subsidiary of jacobson pharma.

In view of the arrangements under the cooperation agreement, the target company Li Zhongshengtang (Group) Co., Ltd. should continue to be accounted for as a subsidiary of jbm healthcare, and the financial performance of the target company will continue to be consolidated into the financial statements of jbm healthcare Group after completion. The target company will become an associate of jacobson pharma after completion, and the financial performance of the target company will not be consolidated into the financial statements of jacobson pharma Group. Changes in the equity of the target company at completion will be accounted for as equity transactions in the jbm healthcare Group, without any income or loss being recognized in the comprehensive income statement of the jbm healthcare Group.

The announcement stated that this licensing arrangement will bring rental income from the unused factory space to ulferts and provide the target company with suitable manufacturing premises. The relocation of the target company's existing facilities that comply with the drug production quality management standards is costly and time-consuming, so this transaction allows the target company to continue its operations without interruption, avoiding relocation expenses.

The net proceeds from the expected transaction are estimated to be approximately 46 million Hong Kong dollars, and are expected to be used as general operating funds for the jbm healthcare Group.