KUALA LUMPUR (July 12): Hextar Global Bhd has acquired chemical derivatives, coating and related products manufacturer and supplier Nobel Group for RM105 million.

In a Bursa Malaysia filing today, the group said the acquisition comes with a profit guarantee of an aggregate of RM42 million over three years which translates into an after-tax profit of RM14 million per year.

The acquisition of Nobel Goup, comprising Nobel Synthetic Polymer Sdn Bhd and Nobel Scientific Sdn Bhd, will be funded through a combination of internally-generated funds and bank borrowings, said Hextar.

“The Nobel Group was set up to provide high performance custom-made anti-tack rubber lubricant and coatings for the rubber industry,” the group said.

The latest acquisition is also the addition to the recent acquisition of Alpha Aim (M) Sdn Bhd and Chempro Technology (M) Sdn. Bhd (Chempro Business) which was approved by shareholders on June 14, 2021.

Commenting on the Nobel Group’s acquisition, Hextar executive director Datuk Eddie Ong Choo Meng said it will provide the group with an immediate presence in the specialty chemical
industry and complement its agrochemicals segment.

“Whilst the Chempro Business was in specialty cleaning chemicals where its products have wider applications across various industries, the Nobel Group is more focused on therubber industry.

“Both these acquisitions come with profit guarantees thus providing downside protection to Hextar and its shareholders. Upon completion, the cumulative sum of these profit guarantees will result in a significant uplift in Hextar Group’s profits,” he said in a statement.

He added: “These recent acquisitions will significantly increase our footprint in the chemical industry and strengthen the group’s growth profile thus allowing us to continue to provide increasing long-term value to our stakeholders.”

Shares in Hextar settled five sen or 5.05% higher at RM1.04, giving the group a market capitalization of RM1.37 billion. Year to date, the stock has increased 85.71% from a mere 56 sen recorded in early January.