HEXTAR (5151) HEXTAR GLOBAL BERHAD acquires Chempro Group for RM138mil
KUALA LUMPUR: Hextar Global Bhd has entered into a share sale agreement to acquire the entire equity interest in Chempro Group of Companies for RM138mil.
According to Hextar, Chempro is a multinational hygiene specialty cleaning chemicals expert with a track record of operating in various locations around Asia, including Singapore, Malaysia, Thailand, Indonesia, Brunei, Hong Kong, Taiwan and China.
Hextar will acquire three companies under Chempro Group, namely Chempro Technology (M) Sdn Bhd, Protek Chemicals & Engineering (B) Sdn Bhd, and a stand-alone company, Alpha Aim (M) Sdn Bhd.
Hextar executive director Datuk Ong Choo Meng said in a statement that Chempro will add value to the group as the agreement comes with a profit guarantee of RM39mil over three years, which translates to a profit after tax of RM13mil a year until the financial year ending Dec 31, 2023.
"Although they are manufacturing a different type of chemicals as compared to our existing core business, we expect these businesses to command strong margins and further strengthen our foothold in the chemicals industry and we think is the right path to go," he said.
The acquisition will be funded through a combination of internally generated funds and bank borrowings.
It is expected to contribute positively to the earnings of Hextar from 3Q FY21 onwards.