Hextar Global buying binge continues with its latest proposed acquisition of the entire issued share capital of TufBond Technologies Sdn. Bhd. which manufactures various types of synthetic latex polymers, for a total consideration of RM13 million.
This will not be the first acquisition for Hextar, the group has already acquired another company just this year, as for TufBond this firm was established in 1998 with its current product line include pressure sensitive adhesives for tapes and labels, binders for textile, flame retardant adhesives for lamination, waterborne spray contact adhesives for the automotive sector, coatings for gloves and adhesives for roofing foils. Its product line for the paper industry includes dry and wet strength resins as well as polyacrylamide resins for flocculants. TufBond’s strong technical know-how and in-house research and development capabilities and years of experience allow it to customise products and formulations to meet customers’ specific requirements. While the domestic market remains to be the key contributor to its revenue, it also exports its products to Vietnam, Philippines, Sri Lanka, Pakistan and Bangladesh.
According to Hextar, the acquisition comes with a profit guarantee of RM2 million per annum being the profit after tax for each consecutive year to derive an aggregate profit guarantee of RM6 million over 3 years. The cash consideration for the acquisition will be funded from internally generated funds and/or borrowings.
Commenting on the proposed acquisition Executive Director Dato’ Eddie Ong Choo Meng said “The acquisition allows Hextar to widen its customer base further to include textile, automotive and construction sectors. Whilst we may be seen to be expanding very aggressively through acquisitions, our acquisition targets are established and profitable companies with strong track records.”
Dato Eddie believes with the profit guarantee, the acquisition will contribute to the Group’s profits and accelerate its value accretion.
