Struggling Smiles Inclusive sells to rivals
STRUGGLING Gold Coast dental roll-up Smiles Inclusive has sold two practices to rival 1300Smiles as it seeks to strengthen its balance sheet.
The West Burleigh-based company did not reveal the sale price for the clinics in Gatton and Laidley, which are both located in the Lockyer Valley region, however it said they represented 4 per cent of the total purchase price paid for the 52 clinics at the company's IPO.
That figure was $63.3 million for 52 practices with 4 per cent being about $2.53 million.
In an ASX statement Smiles said the practices are being sold at a "small premium to book value".
"The agreement remains subject to due diligences, Smiles' lender consent and other customary completion conditions," the statement reads.
"If these conditions are satisfied or waived, completion is expected to occur by no later than 20 December 2019."
Smiles said it is also considering selling its Gympie and Toowoomba practices as part of its turnaround strategy.
1300Smiles managing director Dr Daryl Holmes said the two new practices have "promising growth potential".
"The acquisitions are geographically strategic for 1300Smiles as it continues to expand its network in southeast Queensland," Dr Holmes said.
"We look forward to welcoming the team of dentists and support staff to 1300Smiles following completion."
The company said the practices are located within 18km of each other and complement its existing network, including its Toowoomba and Springfield Lakes practices.
Dr Holmes is a significant shareholder in Smiles.
In October, prior to the latest capital raising, he held 4.96 per cent of shares in Smiles through entity Ashbourne Park Pty Ltd, of which he is a director, making him the company's fourth-largest shareholder.