The purchase price for the new clinic will be paid in cash by TTC and totals RMB 7.1 million which equates to AUD 1.38 million at an exchange rate of 5.15 (AUD:RMB). The total purchase price represents an average EBITDA multiple of 3.5 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 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 eveloping 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) and its wholly owned entities (TTC Group or the Group) operates under the Fuqiao brand and is the largest franchisor and owner of traditional therapeutic health and wellness clinics in China. TTC operates in 29 of China’s 33 administrative divisions and engages 13,000 therapists across its network of 371 franchised and owned clinics. The Fuqiao brand is highly recognised throughout China and a government- recognised industry leader, having received the prestigious Chinese Well-Known Trademark designation. TTC was listed on the Australian Securities Exchange on 3 September 2015 and has a corporate office in Sydney and head office in Chongqing, People’s Republic of China.
More information is available at http://www.ttc-ltd.com/.
Traditional Therapy Clinics Ltd