PETALING JAYA: Hextar Global Bhd has proposed to acquire entire equity stakes in two companies – Nobel Synthetic Polymer Sdn Bhd and Nobel Scientific Sdn Bhd – for RM105mil.

       These companies manufacture and supply chemical derivatives, coating and related products, Hextar said in a statement.

       Hextar said the proposed acquisition for the two companies would be priced at RM105mil and would be satisfied entirely in cash.

       “The acquisition comes with a profit guarantee of an aggregate of RM42mil over three years which translates into a profit after tax of RM14mil per year.

       “The acquisition will be funded through a combination of internally-generated funds and bank borrowings, ” the company said.

       The vendors or the parties who would be selling their interest in Nobel Group are Marcus Mar Hung Than (55%) and Chieng Diing Yaw (45%).

       “The Nobel Group will form part of Hextar’s drive to expand its foothold in the chemicals industry and will be wholly owned by Hextar Global, ” said Hextar’s executive director Datuk Eddie Ong.(pic)

       The Nobel Group has its specialty in providing high performance custom-made anti-tack rubber lubricant and coatings for the rubber industry.

       It produces proprietary formulations with a focus on rubber and/or rubber-related products with customers that include some of the worlds largest rubber glove manufacturers.

       “The Nobel Group continues to endeavor in its research and development initiatives to develop breakthrough technologies for gloves and its manufacturing processes, ” it said.

       The board of Hextar said it has appointed Eco Asia Capital Advisory Sdn Bhd, which is an independent valuation firm, to undertake a valuation of the two companies.

       “The board has taken note of the indicative valuation by Eco Asia. The final valuation report by Eco Asia will be disclosed in the circular to shareholders of the company, ” it said.

       Commenting on the profit guarantee, Hextar said it is realistic after taking into consideration the historical performance and prospects of the companies that would be acquired.

       “In the event the profit guarantee is not met, the group shall be entitled to be reimbursed and deduct from the retention sum an amount of at least equivalent to the shortfall, ” it noted.

       “The board is of the view that the specialty chemicals business segment has significant growth potential, given the favourable outlook and prospects of the industry, ” it added.

       Hextar also said that it intends to retain the permanent staff of the acquiree companies to ensure that there is continuity and that there is no disruption to the day-to-day operations and business.

       Chieng, one of the vendors, who is also one of the founders and key personnel, has agreed to remain in the employment of the acquiree companies and has agreed to employ him during the profit guarantee period.

       His employment would be subject to the terms of a management contract which would be signed later, it said.