Nigeria’s leading oil palm company, Presco Plc, is set to acquire a full equity stake in the Ghanaian Oil Palm Development Company (GOPDC) for $124.9 million.
The move involves purchasing 70,580,000 ordinary shares of GOPDC at $1.77 per share.
According to corporate disclosures, Presco will make an initial deposit of $64.962 million, with the remaining balance to be settled in the future.
This acquisition is expected to enhance Presco’s currency diversification efforts, as GOPDC generates approximately 41% of its revenue from export sales.
GOPDC, a subsidiary of Societe d’Investissement pour l’Agriculture Tropicale (Siat) SA—a key shareholder in Presco—mirrors Presco’s operations.
Both companies are engaged in the cultivation of oil palm, extraction of crude palm oil and palm kernel oil, and the production of refined oil products.
GOPDC operates from two estates in Ghana’s Eastern Region—the Kwae Estate and Okumaning Estate—covering about 21,000 hectares, of which 13,000 hectares are developed.
GOPDC’s facilities include a 60 metric tonnes per hour fresh fruit palm oil mill, a 100 metric tonnes per day refinery, a 60 metric tonnes per day palm kernel mill, a fractionation plant, and a palm kernel cake pellet plant.
The company has an annual production capacity of 35,000 tonnes of palm oil and palm kernel oil and a storage capacity of 21,000 tonnes. It produces red palm oil and vegetable oil under the “King’s” brand and employs around 30,000 workers during peak harvest seasons.
For the year ended December 31, 2023, GOPDC recorded a net revenue of 456.35 million Ghana Cedis (~$30.6 million), a gross profit of 270.35 million Ghana Cedis, and an operating profit of 188.18 million Ghana Cedis.
The company achieved an operating margin of 41.2%. Forecasts predict GOPDC’s revenue will reach 1.2 billion Ghana Cedis ($80.95 million) by 2028, with a slightly reduced operating margin of 39.7%.
The deal will expand Presco’s plantation size by 19%, from 43,457 hectares to 51,760 hectares. Additionally, Presco aims to achieve economies of scale, strengthen its competitive position, and optimize resource utilization.
The transaction is anticipated to enhance Presco’s market value on the Nigerian Exchange (NGX), providing easier access to capital.
Presco recently posted a pre-tax profit of N50 billion in FY 2023, a 152% increase from the N19.8 billion recorded in 2022.
With a net income of N32.9 billion, Presco achieved a return on equity of 57.5% and offered a dividend yield of 10%, making it a highly attractive investment for NGX investors.
