PricewaterhouseCoopers

GWest IPO is here

December 1, 2017 by IC Insider.com

The initial Public Offer (IPO) of shares in the Montego Bay based GWest Corporation is now out with 169.7 million shares offered for sale at $2.50 each. The offer opens on December 7 and is scheduled to close on December 21.
With FosRich and Wisynco opening next week as well it could result in record of 4 IPOs being opened within the same week on the Jamaica Stock Exchange. During July, Express Catering opening on July 12, Stationery and Office Supplies that opened on July 19, Proven Investments with a rights issue opened on July 3, Productivity Business Solutions with an ordinary share issue and a preference share issue that opened on July 5.
GWest offer includes 36,000,000 Shares reserved for the lead broker, JMMB Securities or its clients, 64,000,000 Shares reserved for Jamaica Money Market Brokers’ Pension and Client Funds Investment Management Unit. 19,400,000 Shares are for GWest clients and suppliers and 600,000 Shares for independent directors, the Mentor and employees of the Company. This leaves 69.7 million shares for applications by the general public. If any of the Reserved Shares in any category are not subscribed by the persons entitled to them, they will be made available for subscription by the general public.

Dr. Konrad Kirlew, chairman of GWest.

If the Invitation is successful in raising at least J$250,000,000 and the Shares will be admitted to trade on the Junior Market of the JSE.
The primary purpose of the Company is to provide integrated medical health care services and facilities. The Company established 5 medical businesses under the common “GWest Medical” brand. GWest Corporation owns the GWest Centre, a 4-storey multipurpose commercial complex catering primarily to medical professionals and medical services and in which its owned services will be located. The GWest concept is to provide a wide range of complementary international quality best practice medical services in one location,
The Company will be providing the following medical services to complement those offered by owners and lessees in the GWest Centre:
1. General Practitioner and Specialist Suite (operational since June 2017)
2. A 2,200 square feet Urgent Care Centre (operational since November 2017)
3. Medical Laboratory (to be opened by January 2018)
4. A 5,000 square feet 8-Bed Inpatient Unit (to be opened by September 2018)
5. In addition, its 100% subsidiary company GWest Surgery Centre Limited will own and operate an 8,500 square feet Outpatient Surgery Centre (to be opened September 2018), including two modern operating theatres and two procedure rooms.
The Company has approximately 18,111 square feet of space leased to tenants for periods of 3 to 10 years with lease rates denominated in United States currency, ranging from US$20 to US$22 per square feet. The lease payments are subject to annual increases at a rate of up to 0.5% per annum.

GWest complex in Montego Bay,

Directors include Dr. Konrad Kirlew, chairman, Dr. Leyford Doonquah, Dennis Samuels businessman Denise Crichton-Samuels managing director of Cornwall Medical and Dental Supplies, Peter Pearson, former partner PriceWaterhouseCoopers. Elva Williams-Richard, Chartered Accountant, Wayne Gentles, Accountant, and Mark Hart Businessman and Wayne Wray who is the mentor and director.
The shares are really based of forecast which are vastly different than the historical results. For the year to March 2017 profit reported was $181 million but it includes a large gain on revaluation of the unsold property, amounting to $205 million. The profit was mainly based on income of sale of property. A loss of $29 million was made in the six months to September and for the full year to March 2018 a loss of $111 million is projected, swinging sharply to a profit of $166 million in 2019 and $388 million in 2020 as revenues rise from an estimated $158 million in 2018 to $803 million in 2019 to $1.2 billion in 2020.
Net book value is just $287 million, representing 324,848,485 shares, with net book value of just 88 cents per share, the stock is priced at 3 times book value which can be considered high for a company yet to start showing profit from ongoing operations. The stock is also priced at a high PE of nearly 7.5 times projected 2019 earnings which is way above most other stocks in the market, with a renowned operating track record.

Filed Under: Initial Public Offers Tagged With: Emerging markets, Express Catering, GWest Surgery Centre, Jamaica Stock Exchange, Jamaican stocks, JMMB Group, JMMB Securities, PricewaterhouseCoopers, Productive Business Solutions, Proven Investments, Stationery and Office Supplies

US$22.5m for Berger Caribbean

November 26, 2017 by IC Insider.com

Ansa Coatings US$22.5 million in cash to acquire the holding company of holding the majority shares in Berger’s operations in Barbados, Jamaica, and Trinidad and Tobago in July 2017.
The amount was stated in the valuation report done by PriceWaterhouseCoopers for the Berger Trinidad. According to the report “ANSA represented to us that a total cash consideration paid for the investment in LBOH, of which US$2.976 million was allocated to the 3,613,011 BPTL ordinary shares (representing a value of TT$5.60 per share at a conversion rate of US$1 = TT$ 6.79). ASNA further represented that the purchase consideration was not derived based on an individual territory/ subsidiary basis but for the Caribbean operations as a whole.”
The payment places the consideration of shares in the Jamaican company, close to the price of $10.88 that was offered to the Jamaican shareholders.
According to the report the PWC reports state that “we understand that the offeror also obtained a valuation from an independent valuator as at 31 March 2017. This report estimated that the value of 100% of BPTL’s issued share to be within the range of $4.41 to $5.00 per share, with the best estimate being the midpoint of $4.70 per share.”
ACI made an offer to acquire the remaining minority shares at $6.76 per share, the price it paid to Cham Ramlal ltd. for 9.69% of the shareholding a huge premium over the traded price around $4.05. The cost to acquire the remainder of Berger Trinidad will be just over US$720,000.
The Directors recommended that the shareholders accept the offer. In doing so they took account of the fact that ANSA McAL exercises control and direction over approximately 80.86 percent of the issued and outstanding share capital of the Company. Consequently, the remaining shareholders will, in effect, have limited power to challenge any decisions of the offeror and its affiliates. Further, where the offeror, pursuant to the offer, acquires 90 per cent of the offer shares, there are statutory provisions which empower the offeror to acquire the shares of those shareholders who do not accept the offer.
They also considered the fact that the offer was well ahead of the historical price the stock traded at in the past and the poor profit performance in the past with more expected to come as well as the fairness opinion by PWC. All of that was done without trying to frighten shareholders into giving up their shares and is in complete contrast to the recommendations of Jamaican directors, using false information and withholding others pertinent information from the local shareholders, in trying to bully hem into giving away their shares. Warren McDonald a director of Berger Jamaica is one of the directors of the Trinidad company.

Filed Under: Company News, General Business News Tagged With: Ansa Mcal, Berger Paints, Cham Ramlal ltd, Emerging markets, PricewaterhouseCoopers, Warren McDonald

Wisynco Group IPO is imminent

November 2, 2017 by IC Insider.com

NCB Capital Markets Manager, Origination and Structuring Stanley Thompson (left) exchanges laughs with Wisynco Group Chairman William Mahfood during a signing of the IPO agreement. Sharing in the moment, too, are Wisynco Chief Executive Officer Andrew Mahfood and PriceWaterhouseCoopers Director Fiona Hyman

Wisynco Group today announced its intention to offer shares in the company by way of an initial public offering (IPO), confirming IC Insider.com report yesterday.
Information gleaned is that the draft prospectus is being vetted by the Jamaica Stock Exchange, the Financial Securities Commission and the Company Office of Jamaica with the IPO expected to come to market before the end of this year and could happen in November.
Founded in 1965 by the Mahfood family, West Indies Synthetic Company (WISYNCO) began manufacturing ‘Iron Man’ water boots from a 6,000 square foot factory in Twickenham Park, St. Catherine. The company now ”owns and manufactures a portfolio of category-leading beverage brands such as WATA and its extension of cranberry flavoured-WATA, BOOM Energy Drink and BIGGA Soft Drink. In addition to its owned brands, Wisynco is the exclusive local bottler for the Coca-Cola Company, as well as third-party beverage brands such as SqueezZ and Hawaiian Punch also distributing for global giants such as Red Bull, Tru Juice, Freshhh, Kellogg’s, General Mills, Nestlé and others.
A rapidly-growing company, Wisynco has increased sales significantly in recent years moving from JMD 12.6 billion in 2013 to $21.2 billion in 2017. Over the last five years the company’s year-to-year sales growth has ranged between 9 – 21% with a compound annual growth Rate (CAGR) of 11.06% over the same period. The business has a strong gross profit margins, averaging approximately 36% since 2012.
Wisynco’s revenues are just under the $22.8 billion generated by Lasco Manufacturing and Distributor combined. With the above profit margin, gross profit would be $7.5 billion. The two Lasco companies have administrative, selling and distribution cost of $4 billion to March this year. IC Insider.com puts the cost for Wisynco at $4.5 billion per annum which would result in a pretax profit in the order of $3 million and after tax around $2.5 billion. If the company came to market around the mid-range of PE of 12, this would value it at $30 billion. An issue of 20 percent in the IPO, would target inflows be around $6 billion, but IC Insider.com gathers that a vastly smaller sum is being targeted to be raised by the company but some existing shareholders may seek to divest some of their shares.
According to William Mahfood, Chairman of the Wisynco Group, “the IPO will allow us to share the growth and

Wata produced by Wisynco

success of our business with a wide cross section of our customers and employees, especially following on the outpouring of wishes and support after the fire last year”
With over 350,000 square feet of warehouse, 110,000 square feet of factory space the company has over 700 sales-related full time employees.
We are a proud Jamaican company with a deeply rooted commitment to the country’s development.” Mahfood said. “Our stated mission is to improve the lives of our people which extends to all stakeholders –team members, customers, partners and now with the planned IPO to fellow Jamaicans alike,” Mahfood said.
NCB Capital Markets has been engaged as arranger and broker for the transaction with PricewaterhouseCoopers acting as financial advisors to the company.