KUALA LUMPUR (March 9): Shares in Hextar Global Bhd rose as much as 4.87% to an intraday high of RM1.29 in early trade today after the agrochemical company said it is diversifying its business to include manufacturing and distribution of specialty cleaning chemicals products via the acquisition of Chempro Group.
At 10.40am, Hextar's share price was up four sen or 3.25% at RM1.27, with 2.35 million shares traded. Its market capitalisation stood at RM1.04 billion. The stock was up 41% year-to-date (YTD).
Yesterday, Hextar announced that it is acquiring 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, for a combined RM138 million cash.
Hextar said the proposed acquisitions are the right opportunity for it to tap into the growing specialty cleaning chemicals industry and further strengthen the group's foothold in the chemicals industry. The proposed diversification is also in line with the strategy and expansion plans of the group's management, it added.
The proposed acquisitions come with a profit guarantee of RM39 million over three years, which translates into a net profit of RM13 million for each consecutive year from the financial year ending Dec 31, 2021 (FY21) to FY23.