KUALA LUMPUR (Dec 23): Agrochemical company Hextar Global Bhd (KL:HEXTAR) is acquiring three fertiliser-related companies for RM120 million in a related-party cash transaction.

"The proposed acquisitions are expected to generate operational and commercial synergies with the group’s existing agriculture business by complementing its current product offerings and enabling the group to provide more comprehensive and integrated solutions to customers through a broader range of products, including both agrochemicals and fertilisers," said Hextar in a bourse filing.

The acquisition of the entire stake in PK Fert Sdn Bhd (PKFT) from Hextar's 52.4%-owned unit Hextar Industries Bhd (HIB) is priced at RM3.3 million, while the acquisition of PK Fertilizers Sdn Bhd and and Hextar Fert Sdn Bhd (HFT) from HIB's wholly owned subsidiary Hextar Fertiliser Group Sdn Bhd is valued at RM116.7 million.

PKF and HFT are involved in the manufacturing and trading of a wide range of fertilisers. PKFT is principally involved in the marketing and distribution of fertilisers and serves as a procurement centre for PKF.  

Datuk Ong Choo Meng and his father Datuk Ong Soon Ho are substantial shareholders in both Hextar and HIB. Both Choo Meng and Soon Ho held a 52.4% stake in HIB via Hextar Holdings Sdn Bhd. In Hextar, Soon Ho held an indirect interest of 54.09% via Hextar Holdings, while Choo Meng held a direct interest of 2.14% and an indirect stake of 51.95% as at Dec 10.

Hextar Global said the deal will be funded through a mix of internal funds and bank borrowings.

The move will see Hextar diversify into the manufacturing and trading of fertilisers, a segment that is expected to contribute 25% or more of the group’s future net profit, it noted.

"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 the similar client base and the proposed acquisitions are expected to create synergies across customer reach, distribution and operational efficiency," the group added in a statement

Subject to non-interested shareholders’ approvals at an extraordinary general meeting to be convened, the proposals are expected to be completed by the first half of 2026.

Hextar Global’s shares price closed half a sen or 0.55% to 90 sen, giving the group a market capitalisation of RM3.54 billion.