Frontage Holdings acquires Central Lab to boost China operations

Frontage Holdings Corporation, through its wholly-owned subsidiary Frontage Shanghai, is set to acquire the entire issued share capital of Teddy Clinical Research Laboratory (Shanghai) Ltd. for a total consideration of RMB270,000,000. This acquisition aims to enhance Frontage's central laboratory capabilities and capacity in China, addressing previous market limitations.

The Target Company, a leading domestic central laboratory, will become a wholly-owned subsidiary of Frontage Holdings upon completion, with its financial results consolidated into the Group. The acquisition consideration was determined based on an independent valuation of RMB270m as of June 30, 2025. Funding for the acquisition will be 20% from internal resources and 80% from a bank loan.

For the six months ended June 30, 2025, the Target Group reported revenue of RMB84,849,000 and a net profit after tax of RMB13,420,000, indicating a recovery from 2024. The acquisition is expected to improve the Enlarged Group's net profit to approximately $3.5m for 1H2025, up from the Group’s standalone $2.9m, after accounting for transaction costs and additional interest expenses.