Kuala lumpur: 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 proposed acquisitions aim to strategically extend Hextar Global's agriculture platform by including the fertiliser business as a new business line to complement its existing agrochemical operations.
According to BERNAMA News Agency, Hextar Global stated that the fertiliser operations of both Hextar Global and HIB will continue in their respective existing geographical markets. Hextar Global will focus on Peninsular Malaysia and export markets, while HIB will concentrate on East Malaysia. This separation is driven by logistical considerations and cost efficiencies and is not expected to overlap.
The purchase consideration of RM120 million was determined after considering the latest audited net assets of PKFT, HFT, and PKF as of December 31, 2024, which are RM3.3 million, RM51.1 million, and RM65.3 million, respectively. An independent valuation supported the acquisition, ranging from RM102.5 million to RM126.9 million.
Hextar Global group managing director Lee Chooi Keng commented on the acquisitions, emphasizing that the transaction reinforces the group's long-term agriculture strategy. She highlighted the group's disciplined approach to growth, focusing on opportunities that enhance long-term value, strengthen operating platforms, and uphold sound governance.
Upon completion, 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 segment, expected to strengthen the group's overall earnings through orderly integration and long-term sustainability.
HIB, on the other hand, stated that the disposals will allow the group to redeploy its financial resources. Approximately RM100 million, or about 83.33 percent of the total disposal consideration, will be allocated towards expanding its food and beverage (F and B) retail business.
As part of its expansion plan, HIB aims to grow the presence of 'Luckin Coffee' outlets across the country and explore other F and B ventures. HIB anticipates that the F and B retail business will grow in Malaysia and exceed 25 percent of the group's net assets. Consequently, HIB is seeking shareholders' approval to diversify into the F and B retail business.