Hextar Global To Acquire three Fertiliser Companies For RM120 Mln

KUALA LUMPUR, Dec 23 (Bernama) -- Hextar Global Bhd announced today that it has entered into conditional share sale agreements with Hextar Industries Bhd (HIB) and Hextar Fertiliser Group Sdn Bhd to acquire the entire equity interests in PK Fert Sdn Bhd (PKFT), PK Fertilizers Sdn Bhd (PKF), and Hextar Fert Sdn Bhd (HFT) for RM120 million. 

The group said that the proposed acquisitions represent a strategic extension of Hextar Global’s agriculture platform with the inclusion of the fertiliser business as a new business line within the group to complement its existing agrochemical operations. “Fertilisers and agrochemicals serve a similar client base, and the proposed acquisitions are expected to create synergies across customer reach, distribution and operational efficiency,” it told the stock exchange in a filing.

It said the fertiliser operations of Hextar Global and HIB are expected to continue in their respective existing geographical markets, namely Peninsular Malaysia and export markets for Hextar Global, and East Malaysia for HIB. “This natural geographical separation is primarily driven by logistical considerations and cost efficiencies inherent in serving the respective markets and is not expected to overlap,” it added. 

The purchase consideration of RM120 million was arrived at after taking into account the latest audited net assets PKFT, HFT, and PKF as at Dec 31, 2024, amounting to RM3.3 million, RM51.1 million, and RM65.3 million, respectively, as well as their prospects and strategic fit with the group, supported by an independent valuation ranging from RM102.5 million to RM126.9 million.

Commenting on the proposed acquisitions, Hextar Global group managing director Lee Chooi Keng said the transaction reinforces the group’s long-term agriculture strategy and builds on its core strengths through a closely aligned expansion. She added that Hextar remains disciplined in its approach to growth, evaluating opportunities based on their ability to enhance long-term value, strengthen operating platforms, and uphold sound governance, in line with the group’s objective of building a sustainable and resilient agriculture business.

Upon completion of the acquisition, the fertiliser companies will become wholly-owned subsidiaries of Hextar Global and will be consolidated into the group’s financial results. The fertiliser business will be managed as a separate business segment within the group, and the acquisition is expected to strengthen the group’s overall earnings base through orderly integration and long-term sustainability of the group’s core businesses.

Meanwhile, HIB said the disposals will enable the group to redeploy its financial resources, whereby RM100 million, or about 83.33 per cent of the total disposal consideration, will be allocated towards the expansion of its food and beverage (F&B) retail business.

As part of the group’s ongoing expansion plan, it will continue to grow the presence of “Luckin Coffee” outlets across the country, as well as explore and undertake other F&B ventures.

HIB envisages that the F&B retail business will continue to grow in Malaysia and exceed 25 per cent of the group’s net assets. Accordingly, HIB is seeking its shareholders’ approval to diversify into the F&B retail business. 

-- BERNAMA