KUALA LUMPUR (June 23): Hextar Industries Bhd’s (KL:HEXIND) proposed acquisition of the 51% stake in Woodpeckers Group Sdn Bhd, master franchisee of the llaollao frozen yoghurt chain in Malaysia, for RM177.5 million will proceed under revised terms after the buyer and vendors agreed to extend the profit guarantee period by one year and amend franchise-related conditions.
In a filing with Bursa Malaysia, the company said, the changes come as Middle East conflicts have increased energy and logistics costs, while global uncertainty may affect consumer spending and retail activity.
Under a supplemental sale and purchase agreement signed on June 23, the parties revised the guaranteed profit after tax and minority interests (Patami) targets totalling RM87 million from the original financial years 2026 to 2028 period to financial years 2027 to 2029.
The revised profit targets comprise RM27 million for FY2027, RM29 million for FY2028 and RM31 million for FY2029.
The changes follow discussions with franchisor Llao Llao Malaysia SL, which required a new master franchise agreement to be executed rather than merely providing consent to the acquisition as originally expected.
The parties also cited increased uncertainty arising from Middle East conflicts, which have contributed to higher energy and logistics costs and could weigh on consumer spending and retail activity.
Under the revised terms, the vendors must secure the franchisor's approval through the execution of a new master franchise agreement acceptable to both Petra Empire Sdn Bhd and the buyer.
The company said the changes would allow the guaranteed performance to be assessed over a period that better reflects the operating environment after completion of the acquisition, while maintaining the original commercial safeguards. The aggregate profit guarantee of RM87 million and the purchase price adjustment mechanism remain unchanged.
In the same announcement, Hextar Industries said it will retain PK Fertilizers Sdn Bhd, which was originally planned to be sold to Hextar Global Bhd (KL:HEXTAR), to strengthen its fertiliser supply chain and support long-term growth amid uncertainty in the global fertiliser market.
The change reduced the related-party transaction value by more than half to RM54.5 million.
The proceeds from the disposal of PK Fert Sdn Bhd and Hextar Fert Sdn Bhd will be used to fund Hextar Industries’ expansion of its F&B retail business after deducting related transaction and diversification expenses.
Hextar Industries’ shares were down 1.82% to 27 sen, valuing the company at RM721.2 million. Year-to-date the stock is down 18.18%.