Hextar Global informed its shareholders that its subsidiary Hextar Fruits Sdn Bhd had entered into a sales and purchase agreement with 4 companies involved in durian plantation and distribution for a proposed acquisition value of RM84 million.
Proposed Acquisitions entail the entire equity interest in PEFFM, PEFFTK, and PW&R together with 55% equity interest in PEFP from the Vendor for the Purchase Price.
On the rationale for the diversification, Hextar’s board said it anticipates that the Durian Business will contribute 25% or more of the net profits and or result in a diversion of 25% or more of the NA of our Group.
The board added the proposed acquisitions represent an opportunity for the Group to venture into a new business segment that would enable the Group to diversify and enlarge its earnings base. This is in line with the group’s objective and strategy to deliver sustainable growth and create value for the shareholders of Hextar.
This was also in view of the favourable outlook and prospects of the durian industry underpinned by the potential growth in demand from Asia, in particular China, the Proposed Acquisitions are expected to contribute positively to the future profitability of the Group.
Durian is experiencing a remarkable boom in China which has garnered rapid popularity among Chinese consumers, leading it to become the top fruit import item in terms of both volume and value in the country. In 2022, China imported a total volume of 824,855 metric tonnes of fresh durians at an estimated value of USD4.03 billion.
