Acquisition

M.P. Evans Group PLC, a producer of sustainable Indonesian palm oil, is pleased to announce that its wholly-owned subsidiary, P.T. Evans Indonesia, has, further to the announcement made on 7 September 2023, completed the acquisition of two Indonesian companies, P.T. Agro Bumi Kaltim ("ABK") and P.T. Nusantara Agro Sentosa ("NAS").

ABK and NAS both own oil-palm plantations in East Kalimantan, and between them manage a total planted area of 8,350 hectares, of which 6,664 hectares are under direct ownership and 1,686 hectares are managed on behalf of associated smallholder co-operatives. The majority of the planted area is made up of young palms, with almost 90% planted between 2017 and 2019, and the Group expects yields from these young areas to increase as the palms continue to mature.

The acquisition cost is US$59.4 million, equivalent to US$8,900 per Group-owned hectare, plus an amount for the working capital on completion, expected to be US$4.3 million. The Group is paying total cash of US$41.6 million, being US$36.1 million for the entire share capital of the companies being acquired, and US$5.5 million in settlement of shareholder loans. In addition, the Group is taking on bank loans denominated in Indonesian rupiah in the companies being acquired totalling a further US$22.1 million. The Group's post-acquisition balance sheet remains robust, enabling it to continue reviewing further growth opportunities.

The Group's chairman, Peter Hadsley-Chaplin, commented:

"The completion of the ABK and NAS acquisition is an important step forward in the Group's continuing growth and development. Realising our strategic objective to increase the scale of operations close to our Kota Bangun project will enable the Group to enhance operational efficiencies there. The Group now has over 65,000 hectares under management, and we expect to continue to increase output and achieve future growth, supporting the Group's ambition to deliver progressive returns."