Ong: We will gain access to more chemical brand suppliers and enable further development in-house and we are excited to benefit from PTASR’s strength and expertise to build a more solid business base in Indonesia

KUALA LUMPUR (March 28): Hextar Global Bhd has proposed to acquire 109,900 shares or a 99.91% equity interest in Indonesia-based agrochemical company PT Agro Sentosa Raya (PTASR) for RM10.2 million.

In a bourse filing on Monday (March 28), Hextar Global said it has entered into a share sale agreement to acquire the aforesaid stake, adding that the proposed acquisition is targeted to be completed in 2QFY22 and is expected to contribute positively to the group’s earnings upon completion.

“The purchase consideration will be satisfied entirely in cash which will be funded through internally-generated funds,” it said, adding that the price was arrived at based on PTASR's net assets as per its audited financial statements as at Dec 31, 2021.

According to Hextar Global, PTASR was founded in 2004 and has been involved in the chemical business in Indonesia for over 15 years with its principal business including formulation, mixing and repacking of chemical speciality applications as well as logistic service to assist customers to distribute their products.

“PTASR has recorded growth in its revenue for the past three consecutive financial years from 82.6 billion rupiah in financial year ended Dec 31, 2019, to 102.7 billion rupiah for the financial year ended 2021 despite the economic slowdown due to the pandemic.

“The proposed acquisition is therefore expected to further enhance Hextar Global’s position in the regional agrochemical market,” the group said.

The group noted that PTASR is deemed a related company as it is controlled by Hextar Holdings Sdn Bhd, of which Hextar Global executive director Datuk Eddie Ong Choo Meng (pictured) is a director and substantial shareholder.

Meanwhile, Ong said the proposed acquisition is another step that will allow the group to further entrench its business regionally as well as expand its product range and create revenue-enhancing synergy.

“We will gain access to more chemical brand suppliers and enable further development in-house and we are excited to benefit from PTASR’s strength and expertise to build a more solid business base in Indonesia.

“Hextar’s strategy has been to capitalise on merger and acquisitions to support our growth. We continuously look into investment opportunities that will complement and build on what we have already achieved to strengthen the group’s growth profile thus allowing us to continue to provide increasing long-term value to our stakeholders,” he added.

At 2.28pm on Monday, Hextar Global’s share price gained two sen or 1.26% to RM1.61, giving the group a market capitalisation of RM2.11 billion.

Source: TheEdge - 29 Mar 2022