Ali Health seeks to boost cloud-based pharmacy business

Part of its strategy is to acquire some marketing businesses of Alimama.

China-based healthcare firm, Ali Health, seeks to strengthen its cloud-based pharmacy business by securing Alimama's marketing businesses, according to CGS-CIMB's report.

This is part of the strategy to become a digital health management firm that serves 500 million people within five years.

"The proposed acquisition involves obtaining exclusive rights to operate specific marketing businesses related to healthcare categories on the Tmall Platform. The deal is valued at HK$13.5 billion, to be paid using 2.56 billion new shares and HK$2b in cash, implying a 15x FY23 price-to-earnings ratio," read the report.

The business which has a revenue of RMB 1.2b and after-tax earnings of RMB900m will allow Ali Health to provide marketing materials review services and value-added services to Alimama.

With this, Ali Health will acquire 20% of Alimama's marketing services fee revenue. Ali Health anticipates that this acquisition will contribute to yearly revenue of RMB1.2b starting from FY24.