Jacobson Pharma (02633) and JBM Healthcare (02161) jointly announced that on November 11, 2024, Po Chai Herbal and PCHT (as the sellers) entered into a sales agreement with Ulferts (as the buyer). Po Chai Herbal and PCHT conditionally agreed to sell 0.0565 million shares and 0.044 million shares of sales shares, while Ulferts conditionally agreed to purchase the relevant sales shares, with a total consideration 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 accordance with the arrangements under the cooperation agreement, the target company Lee Chung Shing Tong (Group) Limited will 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 the JBM Healthcare group upon completion. The target company will become an associate of Jacobson Pharma after completion, and the financial performance of the target company will not be comprehensively accounted for in the financial statements of the Jacobson Pharma group. The equity transaction in the target company as a result of completion will be recognized as an equity transaction in the JBM Healthcare group's financial statements, without resulting in the recognition of any income or loss 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.