Halcyon Agri to acquire commodities trader RCMA's polymer division for up to US$33.8m

IN a deal worth up to US$33.8 million, mainboard-listed natural rubber supplier Halcyon Agri has announced an agreement with commodities trader RCMA Group to acquire the assets and entities of the latter's polymer division.

The group said in an exchange filing on Tuesday that the acquisition of the RCMA polymer division provides it with the opportunity to create one of the world's largest distribution hubs for latex and speciality tyre rubber - enhancing its market position.

The acquisition, which will be funded by existing internal resources, comes less than two months after the completion of Halcyon Agri's disposal of its 35 per cent stake in SIAT SA for 192.56 million euros (S$308.24 million).

It is subject to the fulfilment of certain conditions precedent, including relevant approvals from regulatory authorities. The acquisition is expected to complete in the first week of January 2018.

The polymer division offers services for the polymer industry, including natural rubber and latex, synthetic rubber, chemicals and reclaimed rubber, laboratory and certification services, the companies said.

The acquired assets and entities will be injected into two of Halcyon Agri's sales and distribution arms: Centrotrade Holdings (CTH) and New Continent Enterprises (NCE).

A total of four business units will be injected into CTH, which Halcyon said is "set up to function as an active asset manager and funding platform".

These acquisitions will be done with a combination of equity and asset deals with RCMA (Hatyai) Limited and RCMA Terminals BV taking the form of an equity deal. Halcyon Agri will also acquire the polymer-related assets of RCMA Europe BV, RCMA Americas and RCMA Commodities UK.

This is "a move to gain an 'immediate' foothold in the synthetic rubber market," Halcyon said.

The deal will also see NCE take over selected employees from the Singapore-based polymer division of RCMA Asia.

Robert Meyer, executive director and chief executive officer of Halcyon Agri, said: "The acquisition of RCMA Polymer Division is in line with our strategy to expand the depth and breadth of our operations."

Chris Pardey, chief executive officer of RCMA, said: "Whilst the Polymer business has been a core business of the RCMA for many years, this divesture to Halcyon Agri will secure the long-term future of that business and its employees."

With expansion into other sectors within the commodity landscape, the move will also see RCMA focus on building the long-term future of those businesses.

With the acquisition, CTH's parent company GMG Global - acquired by Halcyon Agri and delisted from the Singapore Exchange in 2016 - has also been renamed Halcyon Rubber & Plantations Pte Ltd.

Halcyon Agri shares closed S$0.005 or 0.9 per cent up at S$0.585 on Tuesday.