Southern Acids (M) Bhd announced on Thursday it has entered in a share sales agreement to acquire the remaining 10% stake in Firstview Development Sdn Bhd from Low Mong Hua Sdn Bhd for a total cash consideration of RM23.5 million.

KUALA LUMPUR (Feb 8): Southern Acids (M) Bhd announced that the company has entered in a share sales agreement (SSA) to acquire the remaining 10% stake or 300,000 ordinary shares in Firstview Development Sdn Bhd from Low Mong Hua Sdn Bhd for a total cash consideration of RM23.5 million.

Post-acquisition, Firstview Development — which is engaged in oil palm plantation and milling activities, and currently owns two subsidiaries in Indonesia, PT Mustika Agro Sari and PT Wanasari Nusantara — will become a wholly owned subsidiary of Southern Acids.

The purchase consideration will be settled in six instalments, with the first payment of RM1.5 million to be made upon signing of the SSA, and the remaining payments to be made annually from 2025 to 2028.

According to Southern Acids, the purchase consideration was arrived at on a willing-buyer willing-seller basis, after taking into account the net assets, earnings potential and growth prospects of Firstview Development.

The group opined that the proposed acquisition is in line with the company’s strategy to focus on its milling and cultivation segment and to facilitate the continuing growth of its main business in this segment.

“The proposed acquisition is expected to contribute positively to its future earnings, as Firstview has a positive cash flow from its operating activities and a strong financial position,” Southern Acids added.

In addition, Southern Acids said the proposed acquisition is not subject to the approval of its shareholders or any relevant authority and is expected to be completed by the end of February 2024.

Southern Acids shares closed at RM3.19 on Thursday, remaining unchanged from its previous close. Its market capitalisation stood at RM436.82 million. At the current level, the counter has risen 0.95% year to date, but was 13.32% lower compared with a year ago.