AS Bryden & Sons Holding Limited has acquired a majority stake in Caribbean Producers (Jamaica) Limited.
Trinidad and Tobago-based AS Bryden & Sons Holding Limited (ASBH) has acquired a 44.8% stake in Caribbean Producers (Jamaica) Limited (CPJ) for $5.17 billion (US$32.82 million) and has already indicated its intention to acquire further shares in the company.
The acquisition was made on the Jamaica Stock Exchange (JSE) and marks AS Bryden & Sons’ third major acquisition this year. CPJ is a Jamaican manufacturing and distribution company co-founded by Anthony Mark Hart and Thomas “Tom” Tyler in April 1994. With a focus on the hospitality sector, the company operates a range of retail outlets catering to both the public and holiday home guests.
“Our strategic investment in CPJ will enable ASBH to increase its scale and expand its geographic reach from Trinidad, Barbados and Guyana to Jamaica and St. Lucia. In addition, ASBH will gain new capabilities to serve the hotel, resort and restaurant channels as well as access to foreign exchange earnings. We look forward to working with the talented team at CPJ to grow the great business they have built,” ASBH Chairman PB Scott said in a Jamaica Stock Exchange (JSE) announcement.
The acquisition marks significant changes for CPJ. Richard Pandohie, Managing Director of AS Bryden and CEO of Seprod, will be appointed as CPJ’s new Chairman. Nicholas Hospedales will also become CPJ’s new CEO. Hospedales is the Food and Grocery Director of AS Bryden & Sons (Trinidad) Limited, where he has been with the company for 18 years. CPJ co-founder and co-chairman Tom Tyler has been appointed Vice Chairman and will work as a consultant to the company focusing on customer and supplier relationships and business development opportunities. Tyler, co-founder and chairman Mark Hart and his wife Candace Hart will continue to serve on the CPJ board of directors. Further appointments are expected to be announced in the coming weeks.
“This investment is aligned with ASBH’s geographic expansion strategy. ASBH is currently the largest shareholder in CPJ. We intend to continue purchasing additional shares in CPJ in the future and ultimately obtain a controlling interest, if and when this occurs we will disclose additional information in accordance with applicable regulations,” added Nicholas A. Scott, a director of ASBH.
JSE rules provide that if a takeover results in more than 50% of the voting power in a company, it must make a mandatory takeover offer to other shareholders of the same class. AS Bryden will therefore be required to make a mandatory takeover offer to its shareholders once its shareholding reaches 50%. If ASBH were to acquire more than 80% of the shares, JSE rules could result in delisting.
The acquisition price values CPJ at $11.55 billion (US$73.36 million). CPJ last paid a dividend of $0.07 in January 2018, but with new management coming in, that could change soon.
The CPJ acquisition took place at 1.21pm on the JSE Main Market, with 492,169,329 ordinary shares purchased in 32 transactions at $10.50 each, representing a 44.74% stake in CPJ. Jamaica Observer investigations can confirm that Onyx Investments Limited, a company controlled by Tyler, sold 79,304,792 shares, Ho Choy Limited sold 33,581,579 shares and PWL Bamboo Holdings Limited, a company linked to CPJ director Christopher Berry, sold 20,536,570 shares.
Mark Hart later confirmed to Business Observer that Mayberry Jamaican Equities Limited (MJE) sold 220,814,480 of the listed shares. Hart’s holding companies Sportswear Producers Limited and Wave Trading Limited also confirmed that they had sold CPJ shares to AS Bryden. He did not confirm the exact value of the sale, but through these companies Hart will hold an estimated 335,916,871 shares, or 30.54%. CPJ went public in July 2011 at $2.
MJE’s sale means it has realised an estimated 243 per cent gain on its investment in CPJ. MJE acquired up to 29.99 million CPJ shares at between $2.30 and $3.00 between June 2014 and September 2015. It then acquired 190 million shares at $3.06 in November 2015, after which Christopher and Conrad Berry joined CPJ’s board of directors. It is not yet clear whether the two will remain on the board.
MJE’s two most recent major exits in the junior market were Access Financial Services (sold to Proven Group Limited) in December 2014 and Lumber Depot Limited (sold to Blue Power Group Limited and Stony Hill Capital Limited) in December 2021. MJE sold a 1.47% stake in Wigton to Cacao Holdings Limited on 7 March.
CPJ’s fiscal year only ended June 30, and audited financial statements will not be made public until around Aug. 29. But the company’s third-quarter report showed that for the nine months ended March 31, revenue increased 5 percent to $112.12 million and operating profit increased 17 percent to $8.83 million. Had CPJ not made a one-time general excise tax adjustment the previous year, operating profit would have fallen 2 percent. CPJ’s pretax profit increased 20 percent to $6.24 million. Consolidated net profit increased 24 percent to $4.75 million, but CPJ (St. Lucia) Limited slid from a net profit of $502,959 to a net loss of $28,773.
CPJ’s total assets increased 12% to $101.86 million, with cash at $13.34 million. Total liabilities and shareholders’ equity were $64.83 million and $37.02 million, respectively, with attributable equity at $33.67 million. As ASBH now holds affiliated shares in CPJ, its investment in affiliated companies before taking into account other accounting mechanisms is $15.06 million.
AS Bryden’s move to acquire a majority stake in CPJ means CPJ will change its auditors from KPMG Jamaica to PWC Jamaica in financial year 2025, which is likely to change on December 31. This is KPMG’s latest major client change, following Kingston Wharves Limited in 2023.
At the company’s last annual general meeting (AGM), Pandohy said he wanted Seprod’s consolidated revenue to exceed $1 billion by 2026. Seprod’s consolidated revenue was $112.15 billion, or $723.78 million, as of 2023. If CPJ takes control and consolidates the company, revenue will be boosted to $866.36 million.
“(The) business has grown and is doing well, but there was a gap in terms of being a really significant player in the hospitality sector, so this (acquisition) allows us to get in there. CPJ gives us a strong entry into the hospitality sector, not just in Jamaica, but with hospitality businesses across the region. It makes Bryden’s not just a Trinidad-centric business, it makes it a region-wide business, it improves our foreign exchange earning capacity, it allows us to reach larger companies and represent people,” Pandohy said on the conference call.
The AS Bryden acquisition is the latest major transaction by Musson Jamaica Limited, which is controlled by Paul B. Scott. Productive Business Solutions Limited (PBS) acquired Xerox del Peru SA and Xerox del Ecuador SA from Xerox Holdings Corporation in June. Musson (Jamaica) also holds direct and indirect interests in General Accident Insurance Company Jamaica Limited and TransJamaican Highway Limited, as well as various private companies. Stony Hill Capital also holds a 16.45% stake in Lumber Depot Limited, a 15% stake in Stanley Motta Limited and a 24.99% stake in Eppley Limited.
Musson Investments Limited ultimately purchased 1,922,028 Seprod shares, or 13.78% of the 13,948,000 shares it planned to purchase, for $78, further consolidating PB Scott and Melanie Subrathy’s control over Seprod, giving them a combined stake of at least 50%.
July 15th is Seprod’s 85th Annual General Meeting, which will be held at the Terra Nova All-Suit Hotel at 10am, while July 16th is AS Bryden’s first Annual General Meeting, which will be held virtually at 10am Jamaica time. Today is also the record date for AS Bryden’s dividend of TT$0.01323, which is due to be paid on July 26th.
While Hart is unsure of what the next big thing in his life will be, he is grateful to his staff for their decades of service and looks forward to honoring them at a long-service awards ceremony in August. He also noted that after years of searching for a CEO to take over from the company’s founders, the acquisition by ASBH puts the business in good hands.
“I’m going to be focusing on other things. I’m still in public service, I’m still a cargo handler, I want to put more effort into that and continue to lead CPJ’s success and build on the culture that we’ve built over the last 30 years. I think we’ve built something very special and I’m very pleased that one of the Caribbean’s best and most successful companies has recognized that and wanted to welcome us into their family,” Hart concluded.
During the first quarter, AS Bryden, a 54% subsidiary of Seprod Limited, acquired the remaining 10% stake in Trinidadian company Bryden Pie Limited from founder Norman Tan and a 55% stake in Barbadian distributor and retailer Stansfeld Scott (Barbados) Limited from the family of Brian Cabral.
