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Hextar Global acquires Nobel Group to expand specialty chemicals footprint

Hextar Global acquires Nobel Group to expand specialty chemicals footprint

12 Jul 2021

Local agrochemical company Hextar Global Bhd will acquire the entire issued share capital of Nobel Synthetic Polymer Sdn Bhd and Nobel Scientific Sdn Bhd which manufactures and supplies chemical derivatives, coating and related products – respectively for RM105 million cash.

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 will be funded through internally-generated funds and bank borrowings.

Hextar has entered into a share sale agreement for the acquisition. This follows the recent acquisition of Alpha Aim (M) Sdn Bhd and Chempro Technology (M) Sdn Bhd approved by shareholders on June 14.

Hextar executive director Datuk Eddie Ong Choo Meng said Nobel Group would form part of Hextar’s drive to expand its foothold in the chemicals industry and would be wholly owned by the group based on the approval by regulators and its shareholders.

 “While the Chempro business was in specialty cleaning chemicals where its products have wider applications across various industries, the Nobel Group is more focused on the rubber industry. Together, both acquisitions will provide the Hextar Group with an immediate presence in the specialty chemical industry and complement our agrochemicals segment. Also, both 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 that increasing hygiene and cleanliness awareness and requirement for personal protective equipment driven by the Covid-19 pandemic would see both the Chempro and the Nobel Group contributing in a meaningful way toward the group’s earnings and future growth.

Hextar is maintaining its aggressive strategy of growth and diversification through acquisitions.

“We continuously look into investment opportunities that will complement and build on what we have already achieved. 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,” he said.

The Nobel Group was set up to provide high performance custom-made anti-tack rubber lubricant and coatings for the rubber industry. With their in-house research and development in practical applications of polymers in the rubber industry, the Nobel Group produces proprietary formulations with a focus on rubber and rubber related products. Its customers include some of the world’s largest rubber glove manufacturers.

Source: The Sun Daily

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