PETALING JAYA: Hextar Global Bhd
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 RM120mil.
In a filing with Bursa Malaysia, the agrochemical company said PKF and HFT are involved in the manufacturing, formulation, distribution and trading of a wide range of fertilisers.
“PKF’s principal markets are Malaysia, Indonesia and Australia, while HFT’s principal markets are Malaysia, Myanmar and Mauritius.
“Both PKF and HFT supply straight, mixture and compound fertilisers to corporate plantations, as well as small and medium estate planters and farmers for agricultural purposes.”
PKFT is principally involved in the marketing and distribution of fertilisers and serves as a procurement centre for PKF.
Hextar said the proposed acquisitions represent a strategic extension of Hextar’s agriculture platform with the inclusion of the fertiliser business as a new business line within the group to complement Hextar’s 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.
“While the fertiliser business constitutes a proposed diversification under the Main Market Listing Requirements of Bursa Malaysia, the board views it as closely aligned with, and complementary to, its existing agrochemicals business.”
Hextar believes this approach supports the group’s long-term objective of building a scalable and sustainable agriculture platform through disciplined expansion into adjacent segments.
“In view of the related-party nature of the transaction, the board has considered the operational scope of the fertiliser businesses of both parties following the proposed acquisition.
“The fertiliser operations of Hextar and HIB are expected to continue to be conducted in their respective existing geographical markets, namely Peninsular Malaysia and export markets for Hextar, and Sabah and Sarawak for HIB.”
Hextar said 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.
“The board believes that this arrangement provides sufficient operational clarity and mitigates potential conflicts of interest.”
The purchase consideration of RM120mil was arrived at after taking into account the latest audited net assets PKFT, HFT and PKF as at Dec 31, 2024, amounting to RM3.3mil, RM51.1mil, and RM65.3mil, respectively, as well as their prospects and strategic fit with the group, supported by an independent valuation ranging from RM102.5mil to RM126.9mil.
Commenting on the proposed acquisitions, Hextar 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, Hextar said the fertiliser companies will become wholly-owned subsidiaries 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 core businesses.”
