KUALA LUMPUR (Nov 3): Hextar Global Bhd is buying synthetic latex polymers manufacturer TufBond Technologies Sdn Bhd for RM13 million, cash, as it continues to expand its specialty chemicals sector.

In a bourse filing on Wednesday, the group said it has inked the share sale agreement with Tufbond’s shareholders Lee Siong Kok, Lim Chong Joo, Lim Chong Teck and Low Chee Sin for the acquisition.

The acquisition of TufBond comes with a profit after tax guarantee of RM2 million per annum for three years for an aggregate profit guarantee of RM6 million.

Established in 1998, TufBond's current products 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.

“TufBond’s 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 customize products and formulations to meet customers' specific requirements.

"While the domestic market remains the key contributor to TufBond’s revenue, it also exports its products to Vietnam, Philippines, Sri Lanka, Pakistan and Bangladesh,” said Hextar Global, who intends to fund the buy via internal funds and/or borrowings.

Hextar Global executive director Datuk Eddie Ong Choo Meng said the acquisition will allow the group to widen its customer base further to include textile, automotive and construction sectors.

“Coupled with our recent acquisitions, we are anticipating that the specialty chemicals sector will further contribute to our bottom line, moving forward.

“Whilst we may be seen to be expanding very aggressively through acquisitions, our acquisition targets are established and profitable companies with strong track records. We have identified companies such as TufBond because of their research and development capabilities and their ability to provide us with immediate access to their customer base,” he added.

The acquisition is expected to be completed by the first quarter of 2022.

Hextar Global shares rose 1.27% or two sen to close at RM1.59 on Wednesday, bringing a market capitalisation of RM2.09 billion. The counter has jumped RM184% from when it was trading at 56 sen on Jan 4.