LONDON (ShareCast) - (Sharecast News) - MP Evans announced the completed acquisition of two Indonesian palm oil plantation companies, PT Setara Kilau Mas Adicita (SKMA) and PT Sumber Bumi Serasi (SBS), for a total consideration of $35.1m on Monday, expanding its planted estate in East Kalimantan by 2,750 hectares.
The AIM-traded firm said the transaction, carried out by its wholly-owned subsidiary PT Evans Indonesia, also included an additional 250 hectares managed on behalf of local smallholder cooperatives.

All areas were planted from 2016 onwards and were expected to deliver increasing yields in the years ahead.

The newly-acquired estates would be integrated into the group's existing Bumi Mas operation, with all crop processed at the Bumi Mas mill.

"We are delighted to complete this transaction, in line with our strategic objectives," said chief executive Matthew Coulson.

"Adding the planted areas at SKMA and SBS will bring the total group-managed area at Bumi Mas to almost 12,000 hectares, enabling the group to make a significant difference to the utilisation of the on-site mill.

"The group now manages approximately 70,000 planted hectares across its Indonesian projects."

MP Evans said the acquisition price equated to $12,600 per hectare of group-owned planted land.

An initial payment of $22.5m was made on completion, with a further $12.6m expected to be used to repay loans held within the acquired companies.

The purchase was funded from existing cash resources and was expected to be immediately earnings accretive.

MP Evans said it continued to maintain a net cash position following the transaction.

The company said it would move to register the newly-acquired areas with the Roundtable on Sustainable Palm Oil, consistent with its wider sustainability commitments and goal to increase the proportion of certifiably sustainable output.

At 1134 BST, shares in MP Evans Group were up 2.5% at 1,240.26p.

Reporting by Josh White for Sharecast.com.

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