Halcyon Agri to acquire two firms for $105m

Natural rubber supply chain manager Halcyon Agri Corporation has signed a conditional sale and purchase agreement to acquire two firms, Sumber Djantin and Sumber Alam, for $105.3 million.

Upon completion, the acquisition will add four Standard Indonesian Rubber (SIR) factories, located in Pontianak, Indonesia, with a combined licensed annual capacity of 132,000 tonnes to Halcyon Agri's operations.

Collectively, the four factories are highly regarded producers of SIR and have a strong track record in delivering quality rubber to the global tyre majors.

Combined with the acquisition of Pulau Bintan Djaya, announced last month, Halcyon Agri will operate a total of 19 factories in Indonesia, up from 14 currently.

The acquisition of the five factories will add a total of 192,000 tonnes to the group's annual processing capabilities, pushing its total annual processing capacity in Indonesia to 877,000 tonnes, strengthening Halcyon Agri's competitive edge in the global tyre majors market, and propelling the group to become the single largest producer of SIR globally.

Completion of the proposed acquisition is conditional upon the fulfilment, or waiver, of the conditions precedent, and shall take place on or before March 31.

The purchase consideration will be satisfied by cash and fully funded through existing internal resources.

Halcyon Agri founder and chief executive Robert Meyer said in a recent interview that the group is looking at strategic options to increase its value.

These include listing a business division on another exchange, a secondary listing elsewhere, or even delisting from the Singapore Exchange (SGX) entirely and re-listing elsewhere.

Halcyon listed on the SGX in 2013 with two Indonesian factories producing 67,000 tonnes of rubber. After a three-way merger with GMG Global and Sinochem's natural rubber assets in 2016, it had, as of November last year, 33 factories across Indonesia, China, Thailand, Malaysia, the Ivory Coast and Cameroon, producing 1.4 million tonnes of rubber a year.

With the latest acquisition, its number of rubber processing factories has grown to 38, with a production capacity of 1.6 million tonnes per annum.

A version of this article appeared in the print edition of The Straits Times on January 16, 2018, with the headline 'Halcyon Agri to acquire two firms for $105m'. Print Edition | Subscribe