‘This is a regional move’
Seprod boss says AS Bryden and Sons acquisition is part of the group treating Caricom as a domestic market
CEO of the Seprod Group Richard Pandohie has labelled the proposed takeover of privately-owned Trinidad and Tobago-based distribution company AS Bryden and Sons as part of the move to building Seprod into a true Caricom company.
“This is a regional move. It’s not necessarily about [Seprod] going into Trinidad. It’s a move to build a regional platform,” Pandohie told the Jamaica Observer in an interview shortly after the announcement of the acquisition on Wednesday.
“This acquisition is a quantum leap in moving us into [being] a regional company. For the Caribbean to really advance, we have to really start becoming more of a single market if we are to get scale and capacity. This is not about a Jamaican company acquiring a Trinidad company, it’s about Seprod becoming a Caribbean conglomerate and that is what we are really proud about.”
“If you look at the narrative over the years from the [Seprod] chairman, PB Scott, and myself, we have always talked about treating Caricom as a domestic market,” Pandohie continued.
Paul B Scott is the chairman of the Musson Group of Companies. The Seprod Group is a member of the Musson Group of Companies. Scott also chairs the Seprod Group. At the completion of the acquisition, Scott will assume the role of chairman of AS Bryden and Sons while Pandohie will be the interim-ceo focusing on assimiliating AS Bryden and Sons into the Seprod Group. A permanent CEO will then be appointed who will report to Pandohie.
The current chairman of AS Bryden and Sons Ian Fitzwilliam will retire when the acquisition is completed.
A Trinidad Express article said Ian Fitzwilliam met with staff about the acquisition on Wednesday and told them that “all of the Bryden employees, except himself, would stay in place.”
In a release on Wednesday,
Seprod announced that the transaction is expected to be finalised by May 31, 2022. The deal is, however, subjected to regulatory approval.
The cost of the takeover was not disclosed. “At this stage, we can’t do that due to the terms of the agreement,” Pandohie told the Caribbean Business Report.
Sources in Trinidad and Tobago, however, said the deal could cost in the region of US$100 million to US$120 million. CFO of the Seprod Group Damion Dodd would, however, not be drawn on acquisition cost instead saying, “the acquisition cost is still being finalised, given that it is based on the assets of [AS Bryden and Sons] at the end of May.”
“What we don’t want is to unsettle a very settled company because of rumours,” he added.
Seprod on Wednesday issued a two-year bond worth US$25.4 million in the overseas market through NCB Capital Markets Cayman Limited with the proceeds to be used “for acquisition purposes and the funding of reserve accounts.” The bond is unsecured, pays an interest rate of six per cent and has a bullet payment in May 2024. It is believed the proceeds from the bond will go towards partial payment for AS Bryden and Sons.
“It’s a substantial company. We can put it in the context of revenues. It’s almost the same size as Seprod,” Pandohie said before adding that “Seprod does about US$290 million per year in sales and AS Bryden does about US$240 million.”
AS Bryden, which is one of the largest privately-owned companies in Trinidad and Tobago, was founded in 1923. It distributes food, pharmaceuticals, hardware, houseware and industrial equipment.
It operates through three principal operating subsidiaries AS Bryden & Sons (Trinidad), Bryden pi Limited and FT Farfan. It also operates in Guyana through its subsidiary BPI Guyana and in Barbados through its joint venture Armstrong Healthcare Incorporated Limited.
“They have a lot of similar distribution. They have operations in Guyana which is the fastest growing market in the world. They have operation in Barbados as well,” Pandohie added.
Dodd added that going forward, there are synergies that will be developed. “For example, [AS Bryden and Sons] has the Eve brand in Trinidad and [Seprod] has the Eve brand in Jamaica. We want to make Eve a true regional food brand. AS Bryden also has pharmaceuticals as does Seprod, so we will be doing a regional pharmaceutical business. What we are really trying to do is cover the entire Caricom. With this acquisition we will have a footprint in the two largest Caricom markets, Jamaica and Trinidad and Tobago.”