According to a bourse filing on the Malaysian Stock Exchange Bursa Malaysia Berhad on April 25, 2023, pursuant to Paragraph 9.03(1) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the Board of Directors of PETRONAS Chemicals Group Berhad (“PCG” or the “Company”) wishes to update on the acquisition cost of 100% shares in Da Vinci Group B.V. (“Da Vinci” or “DVG”) (hereinafter referred to as “Acquisition”).
We refer to our earlier announcements dated 16 May 2019 and 13 September 2019 in relation to the Acquisition for a purchase consideration of EUR163 million.
BACKGROUND & RATIONALE
As part of the Acquisition in 2019, PCG via its wholly-owned subsidiary, PETRONAS Chemicals International. B.V. had entered into an earn-out scheme as part of retention programmes for DVG’s key management personnel who previously owned 37.4% of DVG’s shares, collectively.
In the earn-out scheme, 20% to 30% of recipients’ proceeds from the transaction were deferred for 3 to 5 years, where the final payout is based on the equity value of DVG’s business, which is linked to its financial performance.
In FY2022, DVG achieved an exceptional financial performance and realised an EBITDA of EUR83 million, as a result of lower raw material and inventory costs, combined with strong market demand owing to supply chain disruptions and geopolitical conflicts.
Due to the exceptional financial performance, the earn-out portion of the purchase consideration has increased by EUR70 million resulting in the revised acquisition cost of EUR233 million.
We are pleased with the results of this Acquisition to date and look forward to continued growth in this business.
FINANCIAL EFFECTS
The increase in the earn-out payout arrangement will not have any effect on the issued & paid-up share capital of PCG and is not expected to have any material effect on the earnings, net assets or gearing of PCG for the financial year ending 31 December 2023.
