Omni Industries going after $500m in IPO
OMNI Industries Limited, the Spanish Town, St Catherine-based producer and distributor of plastic products, is seeking to raise $500 million in the first initial public offering (IPO) of 2024. The funds are to be raised from the sale of 500 million shares at $1 each.
From the proceeds to be raised in the IPO, Omni Industries in its prospectus released late Thursday said $250 million will go towards upgrading its existing machinery, purchase additional machinery and inject the company with working capital. The remaining $250 million will go to current shareholders.
Omni Industries is a manufacturing company that develops and distributes PVC and hardware products, and houseware and industrial packaging.
“We couldn’t be more excited and proud to see Omni step into the public market. This is the next phase of growth for our company that will open up incredible opportunities to finance our strategic plans for modernisation and ramp up our production capabilities. This IPO and Offer for Sale will also allow us to deepen our roots in existing markets and stretch our branches into new regions and industry sectors. We are pleased to invite potential investors to join us as we grow our footprint, and we eagerly look forward to welcoming you into the Omni family,” said the company’s Managing Director Patrick Kumst.
Omni was founded on September 25, 1974, by German entrepreneur Uwe Kumst who led the company as a small manufacturer and distributor of a limited range of PVC extruded products, with garden hoses as its main focus. The company then began to manufacture PVC water pipes and fittings for both pressure and drain applications. Omni acquired Thermo-plastics Limited in 2001 which was at the time the English-speaking Caribbean’s largest manufacturer and distributor of plastic products.
Omni now operates out of over 130,000 square feet of covered warehouse space on seven acres in the industrial zone in Twickenham Park, Spanish Town, St Catherine. It is now seeking to lower operation costs, create new product lines and search for new market opportunities.
Of the 500 million ordinary shares on offer, 120,931,383 ordinary shares will be made available to the public while the balance is reserved for other applicants. Twenty million ordinary shares will be available for Omni’s 106 employees, 125,068,617 ordinary shares will be available for NCB Capital Markets Limited (NCBCM) and its affiliates, and 234 million ordinary shares will be available for key partners such as suppliers of raw materials and goods, service and marketing providers, and professional advisers to the IPO. The offer opens on May 17. The company’s issued share count would rise to 2.50 billion shares if the offer is successful.
The selling shareholders in this offer are NCBCM, NCBCM’S Caribbean Equity Portfolio and NCBCM’S JMD High Yield Asset and Loan Portfolio which will collect $250 million from the sale of their shares. According to the prospectus, NCBCM would be left with 87.50 million ordinary shares following the sale of 81.25 million ordinary shares. Chairman Von White would retain a 38.31 per cent stake followed by Kumst who would own 15.25 per cent of the company. The remaining shareholders would own less than ten per cent each.
Omni’s 2023 revenue decreased two per cent to $2.04 billion, but its gross profit increased by six per cent to $600.65 million. Due to higher operating costs, the company’s operating profit dipped 17 per cent to $234.32 million. However, lower finance costs saw its profit before tax rise three per cent to $179.55 million with net profit coming in at $150.91 million.
Omni’s total assets decreased 19 per cent from $1.81 billion to $1.47 billion due to a reduction in a due from related company balance. Its total liabilities decreased to $900.54 million with shareholder’s equity improving to $572.42 million.
If Omni’s offer is successful it intends to list on the Junior Market of the Jamaica Stock Exchange (JSE).