Business

Facey selling shares in Seprod

Wednesday, October 17, 2018

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Facey Group Ltd, a subsidiary of the Musson Group, has invited offers for the purchase of 91,914,894 ordinary shares in the capital of Seprod Ltd.

The application, which runs from October 23 to 30, is priced at $23.99 per share. A total of 36,914,894 or 40 per cent of the shares are available to the public, while 55,000,000 has been reserved for the directors of Facey Group and existing Seprod shareholders.

If the offer is fully subscribed, gross proceeds from the invitation will be $2.17 billion, of which approximately $44.37 million is expected to be used to pay transaction costs. Facey Group intends to use the remaining proceeds from the sale of their shares for general corporate purposes.

In March, Seprod made a cash and shares deal with Musson to acquire its consumer goods and pharmaceutical distribution businesses — Facey Commodity Holdings Ltd (“Facey Consumer”), a holding company which owns Facey Commodity Company (Jamaica) Ltd.

Seprod paid US$53.8 million to acquire Facey Consumer, including US$16 million in cash. Facey is also entitled to receive newly issued shares of Seprod worth US$37.8 million or 217,148,936 shares at a price of $23.50 per share.

Of these shares, Facey will purchase 125,234,043, bringing the aggregate ownership of Seprod held by Facey and its affiliate, Musson, to 48.94 per cent or just below 50 per cent.

The remaining 91,914,894 shares are the subject of the invitation and will be purchased by prospective investors including: staff, managers, executives, directors, and former directors of Seprod.

Facey Consumer's business provides distribution to leading global consumer brands such as Brunswick, Boehringer Ingelheim, Goya, KraftHeinz, Mondelez, Nabisco, Pfizer, and Roche. The company has also been a major distributor of Seprod's products.

In the press release regarding the acquisition, Seprod emphasised that strengthening its distribution platform was a strategic priority for the company.

“The acquisition of Facey's consumer business will allow Seprod to take its 14 distribution capabilities to the next level by giving us control of an established, first-class distribution network, which is needed to support the continued expansion of our businesses and expand our portfolio of market-leading brands,” Seprod's CEO and Managing Director Richard Pandohie said.

In April, shareholders voted in favour of increasing Seprod's authorised capital by 250 million ordinary shares to 780 million shares. The issued share capital of the company is 516,397,918 ordinary shares, 45.26 per cent — or 233,747,988 — of which is owned by Musson (Jamaica) Ltd. Coconut Industry Board owns another 163,420,345 or 31.65 per cent of issued shares, while other shareholders control 23.09 per cent or 119,229,585 shares.

Pursuant to the share purchase agreement, Seprod will issue an additional 217,148,936 ordinary shares. In the event the invitation is fully subscribed, Musson (Jamaica) Ltd will own 233,747,988 or 31.87 per cent of issued shares, while the Coconut Industry Board's share ownership will be reduced to 163,420,345, or 22.28 per cent.

Facey Group Ltd will own 125,234,043 shares or 17.07 per cent, other shareholders will own 119,229,585 shares or 16.25 per cent and the nominees will own 91,914,894 shares or 12.53 per cent of issued shares.

The National Commercial Bank has been appointed lead broker on the transaction.

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