Consumer Brands was a billion-dollar deal
GRACEKENNEDY LIMITED paid $1 billion to fully acquire Consumer Brands Limited, a large player in the Jamaican distribution market.
The disclosure comes six months after the deal was struck last August.
“Consumer Brands has now been successfully integrated into the Grace-Kennedy group, and is proving to be a natural fit,” said GK Group CEO Don Wehby in a statement accompanying the conglomerate’s 2017 year-end results.
Consumer Brands distributes products such as Procter & Gamble line, which the company has represented in Jamaica since 1992, handling brands such as Charmin, Bounty, Ariel, Downy, Tide, Always, Tampax, Pampers, Febreze, Crest, and Olay. It also distributes products for 10 other international and local partners through chain and independent supermarkets, wholesalers, pharmacies, beauty supply outlets and convenience stores.
In the four months after the acquisition, September to December, the business contributed revenue of $877.5 million and profit after tax of $82.5 million to the group. The conglomerate reported revenue of $92 billion for 2017, even after a $500 million hit to sales relating to the corned beef ban during the year, and net profit of $4.77 billion. Revenue outperformed inflows of $88 billion in 2016, while profit grew four per cent from $4.53 billion. Grace-Kennedy booked a gain of $418 million on the Consumer Brands transaction, due to the value of intangible assets acquired, being supplier and customer relationships, exceeding the premium paid above book value, GK said.
“A significant factor contributing to the gain was synergies arising out of the relative strength and market position of the group,” the conglomerate noted.