Facey to roll out US$50-m regional expansion

Facey to roll out US$50-m regional expansion

Xerox distributor for the Americas to develop new brands

Thursday, June 12, 2014

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FACEY Group has secured financing for its US$50-million regional expansion of its distribution and telecomunications services.

The International Finance Corporation (IFC), the financial arm of the World Bank, will pony up US$20 million for shares in the locally based conglomerate.

"IFC's investment will provide long-term growth capital required for the company to expand, thereby supporting jobs and increasing efficiency throughout the telecom, IT, food and pharmaceutical value chains," said a statement issued by the international lender yesterday.

"This investment by IFC will allow Facey Group to achieve its strategic objectives, thereby providing better service to a wider network of customers," said Facey Group director and Deputy Chairman of Musson Group, Nigel Clarke, in the same release.

Late last year, Facey approached IFC to seek the equity investment.

Then, the World Bank subsidiary was considering a US$20-25 million investment which wouldn't translate into a stake larger than 20 per cent of Facey's shares "on a fully converted basis". Facey will put up the remaining funds through internal cash generation.

Previously, Musson, through its wholly owned companies Gatcombe Investments and Musson Investments, controlled in excess of 80 per cent of Facey's shares, while Seprod, a publicly listed company 45 per cent owned by the Musson Group, controlled 8.7 per cent.

The remaining shares (9.9 per cent) are owned by Citigroup Financial Products.

"IFC's investment will primarily support the expansion of Productive Business Solutions (PBS), the company's business solutions and IT segment, by providing the working capital required to enter new markets, strengthen existing brands' market shares, fund equipment leases to gain new clients, develop and expand new brands such as Cisco and Oracle," said IFC documents published on its website.

PBS, the distributor for Xerox in the Americas, also plans to provide additional value-added products and services such as IT and data centre services, system integration, digitalisation, imaging, among others.

Additionally, the proceeds are supposed to finance the growth of the telecom business, to include new markets and carriers, upgrade its terminal network to allow for the provision of additional products and services and grow into the open-market channel (sell mobile handsets directly to network independent wholesalers and retailers), the document added.

The IFC indicated that the project is expected to create direct employment via business expansion; support small microenterprise linkages and reseller growth; promote innovation; and finally, support a Jamaican-based group to further expand its footprint in the Caribbean and Central American regions.

Facey Group, which currently earns US$1.2 billion in annual revenues, operates in three main lines of business including its telecom distribution of phone cards mainly for telecommunications provider Digicel; business solutions/IT distribution led by its PBS operations and Xerox distributorship in the Americas; and its consumer distribution of various food including Kraft, Nestle, Goya, Post, Serge Island, Eve and more along with pharmaceuticals including Pfizer, Benjamins, GlaxoSmithKline and others. data indicate.

The group operates in 31 countries across the Caribbean, Central America and the Pacific region, Europe and USA.

Its employees, some 3,200, are spread out with roughly 726 employees in the telecom operations, about 1,373 in its business solutions operations (with 91 outsourced), and about 858 workers in its consumer operations.

The centrepiece of Facey's business model, according to the IFC, is a regional distribution and service platform covering over 150,000 points of sale that allows the company to benefit from economies of scale and access smaller markets than could otherwise be serviced in an economically viable manner.

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