Rapid True Value

Grace Kennedy sells H&L interest

Grace Kennedy has sold its 58.15 percent interest in Hardware & Lumber (H&L) with the shares traded over the Jamaica Stock Exchange floor today by broker – GK Capital Management in the amount of 47,013,417 shares at $18.50 each.
The shares are sold to, Argyle Industries Inc. (“Argyle”) a St. Lucian Company special purpose vehicle incorporated for the purposes of acquiring and holding the Investor’s equity interests in Hardware & Lumber. The investors in Argyle include a group of investors led by, ABBECO INVEST S.A. ( a Bahamian investment company), Sterling Asset Management along with its affiliates and associates and Greystone Equity Partners Inc. along with its affiliates and associates a release from Grace Kennedy said.
Grace Kennedy Group CEO, Don Wehby, stated “As previously indicated GraceKennedy’s decision to sell our shares in H&L was not an easy one, however, this divestment is consistent with our present strategy of concentrating on the food business locally and internationally and financial services in the region.” He added, “I feel very positive about the continued growth of H&L under the prospective new owners, Argyle, who are excited about the possibilities for the future.”

Rapid True Value owned by Hardware & Lumber an associate of Pan Jam

Total revenue for the nine months to September this year was $5.37 billion or 2.3 percent more than the comparative period in 2014. Profit after tax for the nine-month to September 2015 was $64 million, 43.2 percent less than the $112.9 million for the same period in 2014.
H&L comprises the Rapid True Value and the Agro Grace business. There are currently 10 Rapid True Value outlets across Jamaica, along with six Agro Grace Retail Centres. The company is headquartered at in Kingston.
The buyers will be required to make an offer to buy the remaining shares at the same price of $18.50.

$18.50 per share max price for H&L

Grace Kennedy is advising that the terms to dispose of their holdings in Hardware and Lumber (H&L) include a maximum price of J$18.50 per ordinary share subject to conditions and with completion anticipated by the end of July.
The above price is just around book value at the end of March this year and would give Grace Kennedy who owns 58.1 percent of the 80.842 million shares in issue, $845 million.
Don Wehby CEO of Grace indicated that the agreement is conditional and stated that “GraceKennedy is looking forward to the conclusion of the transaction in a timely manner and will communicate further as soon as it is finalized.” He reiterated that Grace Kennedy’s decision to sell its shares in H&L was a strategic one, having regard to its core strategy of expansion in the foods and financial services sectors. He added, “We feel very positive about the continued growth of H&L under the prospective new owners who have signalled that they are excited about the possibilities for the future”.
H&L currently comprises two separate divisions – Rapid True Value local supplier of hardware and home improvement products, and the Agro Grace business, local wholesaler and retailer of agricultural products.
There are currently 10 Rapid True Value outlets across Jamaica, along with six Agro Grace Retail Centres. The company is headquartered at 697 Spanish Town Road in Kingston.
Greystone Equity Partners Inc. the proposed purchaser is a Caribbean based and Caribbean focused private equity firm with a stated strong commitment to the Caribbean.
H&L reported profit in 2014 of $217 million or $2.69 per share. Profit after tax for the three-month ended March, 2015 was $34.5 million, 14.5 percent less than the $40.4 million for the same period last year and earnings of 43 cents per stock unit, compared to 50 cents for the comparative period in 2014 after revenues fell 4.5 percent to $1.73 billion.