LONDON (ShareCast) - (Sharecast News) - MP Evans announced on Wednesday that it has agreed to acquire two Indonesian plantation companies, adding 2,750 hectares of planted oil palm land to its portfolio in a $34.2m deal.
The AIM-traded firm said the acquisition aligned with its strategy of expanding near its existing operations and will be funded from existing cash resources.

It said the two companies, PT Setara Kilau Mas Adicita and PT Sumber Bumi Serasi, are located close to MP Evans' Bumi Mas estate and mill in East Kalimantan.

In addition to the directly owned land, the acquisition included a further 250 hectares managed on behalf of associated smallholder cooperatives.

The total crop from the estates reached 50,300 tonnes in the year ended 30 June 2024, with MP Evans describing the plantations as relatively young, having been planted since 2016, and thus were expected to deliver increasing yields over time.

Once completed, the acquired estates would be integrated into the Bumi Mas operation, with all harvested crops processed at the Bumi Mas mill.

The $34.2m consideration equated to $12,500 per planted hectare and would be subject to adjustments at completion, which was expected in the third quarter of 2025 pending legal and regulatory formalities in Indonesia.

MP Evans said the transaction was expected to be earnings enhancing and would be completed without recourse to debt, maintaining the group's strong net cash position.

In line with its sustainability commitments, the group said it would work to bring the new estates under Roundtable on Sustainable Palm Oil (RSPO) certification, further increasing the proportion of its output that is certifiably sustainable.

"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 profitable utilisation of the on-site mill," said chairman Peter Hadsley-Chaplin.

"This is another step forward in the group's growth strategy, after which it will manage almost 70,000 planted hectares across its Indonesian projects."

At 1016 BST, shares in MP Evans Group were down 1.01% at 980p.

Reporting by Josh White for Sharecast.com.

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