Paragon Care Limited (ASX:PGC) entered into a scheme implementation deed to acquire Quantum Health Group Limited (ASX:QTM) for AUD 83.6 million on November 8, 2021. As per terms of transaction, Quantum shareholders will receive 0.243 Paragon Care shares for each Quantum share held at the scheme record date. Following implementation of the Transaction, the merged entity will be owned approximately 56.17% by Paragon Care shareholders and approximately 43.83% by Quantum shareholders. Quantum will be entitled to nominate two directors to join the Board of Paragon Care immediately following implementation. Certain key executives of Quantum to enter into new employment agreements and no regulatory restraints to implementation of the Scheme. After implementation of the Scheme, John Walstab is expected to own 19.99% of the merged entity. Quantum and Paragon have agreed to pay a mutual Break Fee of AUD 1 million to each other, in certain circumstances.

There is no capital raising associated with the transaction and Paragon Care shareholders do not need to take any action. Transaction is subject to court approval and Quantum shareholder approval. The Quantum Board unanimously recommends that Quantum shareholders vote in favor of the Transaction. As of January 27, 2022, Quantum shareholders approved the transaction. As on February 1, 2022, Supreme Court of New South Wales has made orders approving the proposed scheme of arrangement between Quantum and its shareholders under which Paragon will acquire all of the issued ordinary shares in Quantum. Quantum will lodge a copy of the Court's orders with the Australian Securities and Investments Commission on February 2, 2022, at which time the Scheme will become legally effective. Transaction is expected to complete by Mid-late February 2022. As of December 17, 2021, the transaction is expected to be completed on February 16, 2022. Quantum confirms that it has lodged a copy of the Court's orders with the Australian Securities and Investments Commission (“ASIC”) and the Scheme has therefore become legally effective. Quantum will request trading in its shares to be suspended from close of trading on ASX on February 2, 2022. Johnson Winter And Slattery acted as legal advisor to Quantum Health Group Limited in the transaction. Clayton James, Mark Simkiss and Stephanie Simm of Herbert Smith Freehills acted as legal advisor to Paragon Care.