SD Guthrie announced yesterday that it has acquired a 48% equity interest in Netherlands-based Marvesa Supply Chain Services (Marvesa) for EUR54m (or RM250m) to penetrate into the European animal feed and biofuel industries. We believe this acquisition would help strengthen its presence in the European oils and fats industry. However, given the lack of financial information such as earnings and profitability of this company, we are unable to assess its impact on the group at this junction. Meanwhile, the 4QFY24 results are expected to be released on 27th Feb 2025 and we expect to see better results on the back of stronger CPO prices. Maintain Neutral with an unchanged TP of RM4.85 based on 20x FY25 EPS.

• Salient details about the acquisition. The 48% stake was purchased from Parcom, a Dutch private equity firm, for EUR54m (RM250m). The remaining 52% stake is held by BGR Beheer B.V., which is owned by the current management of Marvesa.
• Background of Marvesa. Marvesa is a long-established industry player in the European market, specialising in the sourcing, blending and distribution of oils and fats to the animal feed and biofuel industries. It has a diversified pool of customer base in 11 countries, comprising traders, distributors, and multinational feed producers. It has a refinery based in Zwijndrecht with an annual capacity of 300,000mt. The refinery produces a variety of oils and fats that are widely used for industrial frying, emulsifiers, bakery and confectionary ingredients, margarines, dairy products, candles, and milk substitutes. Besides the Netherlands, Marvesa also has a presence in Indonesia to cater to the increasing demand for animal feed ingredients. Marvesa also has an established trading arm in lecithin, soy and other soft oils.
• A synergistic deal. The acquisition would allow SD Guthrie to strengthen its presence in non-palm sectors while Marvesa can also tap on SD Guthrie's strong presence in the Southeast Asia's palm oil industry. In addition, SD Guthrie can tap on Marvesa's existing customer base for its certified sustainable palm oil products, which account for 12% of global supply.

Source: PublicInvest Research - 4 Feb 2025