Atlantic Hardware launches $500m IPO

Atlantic Hardware & Plumbing Company Limited is seeking $500 million from junior stock market investors via an initial public offering of shares on the Jamaica Stock Exchange.

The offer of 499,999,800 shares at $1 each, runs from February 27 to March 13. The lead broker is JMMB Securities Limited.

Incorporated in November 1994, Kingston-based Atlantic Hardware specialises in the distribution of hardware items. The company says it draws its 1,000 repeat customers from among hardware stores, contractors, developers and some retail customers.

In May 2024, rival Lumber Depot Limited announced that it bought a 35 per cent stake in Atlantic Hardware & Plumbing for $210 million.

The board of directors comprise Paul ‘PB’ Scott as chairman, Jeffrey Hall, Sharon Donaldson, Deanall Barnes as CEO, Noel Dawes, Lisa Kong, founder Donald Fung, Alexander Marston and Sekou Crawford.

For financial year 2023, Atlantic reported revenue of $1.4 billion and pre-tax profit of $147 million. For 2024, its nine-month results show revenue of $1.23 billion, up 12 per cent year-on-year, but pre-tax profit shrank by 64 per cent to nearly $84 million.

The net proceeds of the IPO, about $470 million, will be utilised to clear debt and grow the company, Atlantic said. As at September 2024, the company held negative equity of $68 million, amid a spike in its long-term debt from $177 million to $1.34 billion, and a depletion of its cash holdings from $426 million to $140 million. Some $230 million of the debt is to be shaved from the proceeds of the sale of Atlantic’s property at 7A Ashenheim Road on January 8 of this year.

Ownership of the company is currently split among Construct Group Limited, 50 per cent; Lumber Depot Limited, 35 per cent; and General Accident Insurance Company Jamaica Limited, 15.0 per cent. Construct Group is connected to PB Scott and Barnes.

Post-IPO, the ownership of those three entities will be diluted to 39.8 per cent for Construct Group, 27.9 per cent for Lumber Depot, and 11.9 per cent for General Accident.

neville.graham@gleanerjm.com