Family-owned pharmaceutical distributor RA Williams Distributors Limited is opening its books to outside shareholders as it seeks to raise funds to settle about $306 million in debt to banks and the estate of the late Chairman Rabie Danvers “Danny” Williams, while also seeking cash to fuel growth plans.
The St. Catherine-based pharmaceutical distributor said it is seeking to raise a total of $400 million in new capital, apart from repaying debt, including a short-term Sagicor Bank Jamaica loan, and will put $46.35 million towards working capital and solar power generation at its New Brunswick Village and Spanish Town operating facilities, as well as paying fees related to its initial public offering (IPO). The IPO will be priced at $1.00 per share, and the company needs to raise a minimum of $265 million for the offering to be successful.
“RA Williams’ decision to list marks an important milestone in our growth journey. We have been a trusted presence in Jamaica’s distribution industry for over a decade, offering a wide range of high-quality products across various sectors. Our commitment to customer satisfaction and efficient service is supported by a dedicated team and strong supply chain network. We are also deeply committed to corporate social responsibility and actively support community development and charitable causes. This IPO will enable us to expand our operations and increase our capacity to deliver our unique pharmaceutical products to the wider market. With Sagicor Investments at the helm, we look forward to a successful IPO,” Audrey Reid, CEO of RA Williams Distributors, said in a press release.
RA Williams was registered in October 2009 but began operations in 2010. The company began operating as a small retail pharmacy in Chapleton, Clarendon, before switching to a full-service pharmaceutical distributor in Brunswick Avenue, Spanish Town, St Catherine in 2012. RA Williams currently sells to pharmaceutical manufacturers such as Aristopharma, Square Pharmaceuticals, Indus Life Sciences, IPCA Labs, MSN Labs and Aculife.
From left, Jewel Reid, COO, and Audley Reid, CEO, RA Williams Distributors Limited.
Of the 400 million ordinary shares being offered, 210 million will be offered to the public, while the remaining 190 million will be reserved for other applicants. Of the reserved shares, 30 million will be reserved for 70 current RA Williams employees, former employees at the discretion of the directors, and the company’s current directors and advisory committee members. The remaining 160 million shares will be offered for the company’s existing clients, consultants, suppliers and key strategic partners, including funds managed by Sagicor Investments Jamaica Limited and Sagicor Life Jamaica Limited. The offering opened on July 17 and is expected to close two weeks later on July 31. If the offering is successful, it will increase the company’s issued ordinary shares to 2 billion.
Runwill International Holdings Limited, owned by Evelyn Williams, Audrey Reid and Jewel Reid, is RA Williams’ largest shareholder with 49.37 percent. This is followed by Jorden Investments Limited, owned by chairman John Bailey, and Labours Limited, owned by the heirs of Danny Williams, with 24.69 percent each. The remaining shares are held by 11 other shareholders. These ownerships are expected to change following the IPO.
RA Williams’ revenue grew from $421.9 million in April 2019 to $1.41 billion in April 2023 due to an expanding customer base and product range. Also, during the same period, operating profit increased from $49.7 million to $161.21 million, and pre-tax profit increased from $44.5 million to $123.04 million.
For the unaudited period through 2024, RA Williams’ revenue increased 6% to $1.5 billion and gross profit increased 17% to $693.15 million. This increased gross profit margin from 42.12% to 46.31%. However, operating profit decreased 17% to $133.51 million due to a 30% increase in operating expenses. Profit before tax decreased 21% to $97.59 million and net profit decreased 14% to $84.65 million.
If RA Williams’ proposal is successful, attracting $400 million in subscriptions, and it is listed on the Jamaica Stock Exchange’s (JSE) Junior Market, the company will not pay income tax for five years, and will pay 50 percent of the applicable tax rate for the following five years. It will also become the 55th company to ever list on the Junior Market, but once six companies have been listed on the Senior Market, it will become the 48th company to be listed on the index.
The company recently concluded negotiations with Fourrts (India) Laboratories Pvt Limited and Mankind Pharma Limited to introduce new treatment options in areas requiring anti-infectives and dermatology treatments. This is part of the company’s strategic plan to continue building strategic relationships with key suppliers to support the new surgical facility with 21,000 sq. ft. of surgical space.
RA Williams’ growth plans will see it compete with publicly listed companies such as Indy Pharma Jamaica Limited, Lasco Distributors Limited and Medical Disposables and Supplies Limited. It will also compete with Carimed Group Limited, Facey Commodities, Massey Distribution (Jamaica) Limited and Medimpex. It is also worth noting that Trinidad-based Agostini’s Limited entered the Jamaican market with the acquisition of Health Brands Limited in 2023.
RA Williams intends to have a dividend policy of paying out up to 25% of distributable net profits once listed, subject to reinvestment requirements.
The board includes chairman John Bailey, Evelyn Williams, Audrey Reid, Jewel Reid, and independent directors Dr Tonoya Borrows, Dr Marjorie Fife-Campbell and Douglas Lind. The company has applied to the JSE for an exemption from the mentor requirement but plans to appoint Dr Fife-Campbell if the exemption is not granted. Directors currently receive a fixed annual remuneration of $1.5 million.
Interested investors can apply for the offer through SIJL’s eInvest platform (einvest.sagicorjamaica.com) until the scheduled closing date of July 31. The minimum number of shares to apply for in the offer is 1,000 units, with increments of 100 units only. A JCSD processing fee of $172.50 is payable at the time of application.
