The purchase price for the new clinic will be paid in cash by TTC and totals RMB 6.9 million which equates to AUD 1.34 million at an exchange rate of 5.15 (AUD:RMB). The total purchase price represents an average EBITDA multiple of 3.2 based on the clinic's earnings in the 2016 financial year.
TTC is focused on building on its established market position and expanding its owned clinic network in key strategic areas of its business coverage. Settlement of the acquisition is expected to be completed during Jan 2017. The total number of franchised and owned clinics and new franchise licences granted and clinics acquired by TTC during 2015 and 2016 calendar years is shown in the link below.
TTC's Growth Strategy
TTC's multi-pronged growth strategy includes focusing on:
- Growing its number of franchised clinics; and
- Expanding its owned clinic network through the acquisition of existing clinics (from third parties or franchisees) or developing greenfield owned clinics in suitable locations.
The "owned clinic" model is one key focus of the company given the ability to generate a greater return on investment and its added advantage of assisting with projecting TTC's brand and further demonstrating the high standards of quality and service within the TTC network.
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About Traditional Therapy Clinics Ltd
Traditional Therapy Clinics Limited (ASX:TTC) is a franchisor and the owner of one of the largest chains (by number of clinics) of traditional therapeutic health and wellness clinics in China. It currently has 346 franchised clinics and 26 owned clinics in operation. It is a well established business with a strong growth profile, employing a repeatable and scalable business model. TTC has a highly recognised and respected brand, having received the prestigious Chinese Well-Known Trademark designation from the State Administration for Industry and Commerce. It operates within a strongly regulated industry sector of significant scale, which offers opportunity for further growth.
TTC is an ASX listed company employing around 1,000 staff across 27 of the 33 administrative divisions in China. More information is available at www.ttcltd.
Traditional Therapy Clinics Ltd