Before year end, Seprod Group will take its new Trinidadian subsidiary public and list it on the main market of the Jamaica Stock Exchange.
AS Bryden & Sons, a large distributor in which Seprod acquired a majority stake at mid-year, is also to be listed at a later date on the Trinidad & Tobago Stock Exchange, Seprod CEO Richard Pandohie said, but no definitive timeframe has been set.
The JSE listing will be via an initial public offering of shares, or IPO, he told the Financial Gleaner.
The plan for the listing was disclosed late Thursday as Chairman Paul Scott and Pandohie hosted an investor briefing on the AS Bryden acquisition.
Scott says the move to take the Seprod subsidiary public is in line with the Seprod philosophy of worker participation and direct management ownership.
“There are very few organisations where there is transformation in the organisation of the lifespan of 20-25 years where the management are not partners in the business. It is very rare,” Scott says, noting that the ownership philosophy is aimed at attracting the best talent that is invested and aligned with company philosophy and strategy.
Seprod owns 60 per cent of AS Bryden, while the other 40 per cent is spread among various investors, inclusive of managers and directors of the company, Seprod has said.
Seprod completed the acquisition of AS Bryden in June 2022, but is yet to disclose the value of the deal.
Subsequently, the Jamaican company reported a 56 per cent revenue boost and a 49 per cent increase in second-quarter profits. Pandohie said at the release of the report that had it not been for the acquisition of AS Bryden, which only impacted about a third of the quarter, the company’s financial results would have been lacklustre.
“If we didn’t have the Bryden Group on our books and we had taken just the Jamaican performance by itself, the results would have been flat,” he told the Financial Gleaner at the time.
Companies listing on the JSE have to sell at least 20 per cent of its ordinary shares to the market. It’s unclear how much Seprod’s holdings would be diluted or reduced after the offer, and whether it would impact the block of minority holdings. Those details are still being worked through, according to Seprod and the lead arranger of the offer, NCB Capital Markets Limited.
Scott said, however, that AS Bryden would continue to operate as a subsidiary of Seprod afterwards.
The Trinidad-based company would become the seventh entity connected to the Scott-led Musson Group to list on the Jamaica Stock Exchange. The current six are inclusive of Seprod.
Scott says that going public would drive a culture of generating strong cash flow and prudential management of resources in the long run.
The systems integration of Bryden with Seprod is ongoing, but once finalised would change the size and scale of the Jamaican operation, which is projected to hit US$600 million in annual sales by year end, relying on over 3,000 employees.
At acquisition, the annual revenue of both entities combined was said to be around US$530 million.
The combined companies will have a presence in the big markets of the Caricom region, Scott said, including Jamaica, Trinidad & Tobago, Barbados, and Guyana.
Regarding the latter’s economy, which is growing exponentially due to oil finds there, Scott says Seprod will have a major presence in the South American country through a pharmaceutical business and industrial supply company called Icon.
“We believe that with all of the infrastructural growth and investment that will be going into Guyana that the company is uniquely poised for exponential growth,” he said.
Guyana’s economy is forecast to grow 58 per cent this year. The country is located on the South American continent but aligns geopolitically with the Caricom bloc. Its capital is also home to the Caricom Secretariat.
Pandohie said that with the oil reserves identified in Guyana and the rate of growth seen, it represents an inflection point for the region, since the explosion of economic activity will drive growth in other Caricom countries as investments flow in.
Seprod’s third quarter earnings report becomes due at mid-month. For the second quarter ended June, the group achieved net profit of $984 million off $16 billion in revenue.