Mailpac heads towards IPO


Mailpac heads towards IPO

Sees greater growth from online shopping

Wednesday, October 30, 2019

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Mailpac Group Limited, a company recently established to consolidate the operations of Mailpac Services and Mailpac Local, which are two e-commerce businesses owned by Norbrook Equity Partners (NEP), announced that it will be targeting an initial public offering (IPO) in the next few weeks.

The proceeds of the IPO will be used to repay the significant growth investment Mailpac Group received from NEP over the past two years, as well as to position the company's balance sheet for future growth.

Over the past two years, NEP invested over $250 million into the companies that make up Mailpac Group to revamp the company's infrastructure, technology and strategic positioning. These investments were made to enable broader market acceptance and faster growth by making shopping online easier, cheaper and more accessible for all Jamaicans. This strategy has paid off handsomely for Mailpac Group that now stands as the dominant market leader in local e-commerce, according to a recent news release.

“Over the past two years, with a rapidly crowding e-commerce market, NEP decided to make a significant strategic investment in Mailpac Group and its various business lines,” said Khary Robinson, executive chairman of Mailpac Group.

“The goal was to meaningfully differentiate the company from the many competitors in the space. Accordingly, we eliminated membership fees, reduced rates, and increased our distribution to eleven delivery locations.”

“More importantly, with our partners at Aeropost, we developed a number of exclusive technological and infrastructural advancements that has made Mailpac unique in its market offering,” added Robinson. “These advancements include a cutting-edge tracking and customer service app, free returns for all packages shipped through Mailpac, a personalised tax-free address available for use by all Mailpac customers, an exclusive landed price tool and shopping platform, an instant approval financing application, and exclusive technology integration with global leaders in ecommerce such as Amazon, eBay and FedEx.”

The introduction of these unique solutions has allowed Mailpac to further differentiate itself from other providers in the market and significant increase its growth in the process.

In fact, the company's recent investments in technology and infrastructure has propelled the business to a record setting revenue growth rate of 23 per cent in 2018. More importantly, the company is on pace to have its most successful year yet, with year-over-year (YOY) revenue growth of 24.6 per cent for the first three quarters of 2019 – a year in which the company expects to generate over $1.1 billion in revenue and earnings before interest, tax, depreciation and amortisation (EBITDA) of over $290 million, the release said.

The management of Mailpac Group says it is excited about the timing of its IPO, which it expects to be the largest junior market offering in Jamaica's history.

The company believes that Jamaica is on the cusp of an e-commerce revolution – one that Mailpac Group is best positioned to lead.

“While online shoppers in Jamaica have jumped from an assumed 0.2 per cent of the population in 2009 to approximately 6 per cent today, this is a far cry from the penetration rates seen in the United States, where the percentage of the consumers that shop online reached a high of 79 per cent in 2018.” said Robinson.

“Coupled with the fact that there are a vast number of smaller players creating awareness around the benefits of shopping online, we are seeing a rapidly growing base of new online shoppers, all of who ultimately gravitate to Mailpac given that we have the scale and scope to serve them with superior technology, infrastructure, service, responsiveness, insurance and proximity.”

Mailpac has selected NCB Capital Markets as its broker for the IPO and a prospectus on the company is expected to be issued in short order.

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