BY SHAMILLE SCOTT

Business reporter

scotts@jamaicaobserver.com

MEDICAL Disposables and Supplies aims to raise $115 million from its initial public offering (IPO) that opens on Friday.

The company, which distributes pharmaceutical products and disposable medical supplies, will offer up to 63.2 million shares, or a 24 per cent stake in the company at $1.83 a share.

Funds raised will pay off bank debt, directors’ loans and balances that will further strengthen the capital base of the company for future expansion of existing product ranges, growth into new product ranges, and underserved niche markets.

Up to the end of March, the company had $28.6 million owing to its directors.

The directors consider that a broader inventory base will help the company to appeal to new and existing clients and enhance its competitive advantages, Medical Disposables and Supplies said in its Junior Market prospectus.

“Introduction of new product lines in niche areas — the directors propose to invest in initiatives that target specific industry segments that they consider to be underserved, where product availability is a concern for customers,” according to Medical Disposables and Supplies.

Invariably, the expansion drive may require the company to increase its current storage facilities to order new inventory.

In its IPO, Medical Disposables and Supplies reserved a 2.08 per cent stake in the company for its staff and key partners, and 4.8 per cent for clients of Mayberry Investments, the lead broker and arranger of the offer.

The offer closes on December 20.

The company’s revenue moved from $172 million in the financial year 2008 to $723 million by the end of the financial year 2012, an average growth rate of 63 per cent.

The performance was attributable to the addition of product lines to the company’s pharmaceutical segment and the wider variety of products helped it to attract and maintain stable customer demand.

Profit before tax moved from $16.4 million in the financial year 2008 to $49.8 million in the financial year 2012.

Profit before tax amounted to $19.88 million for the three months ended March 31, 2013, when its capital base stood at $152 million.

The board expects to declare and pay an annual dividend on the ordinary shares that amounts to not less than 25 per cent of its net profits available for distribution.

When Medical Disposables and Supplies began trading, the company specialised in medical and hospital supplies and disposable items such as surgical masks, gloves, tubes, gause and adhesive and other bandages. It later expanded into the distribution of pharmaceuticals and health and personal care items and other consumer goods.

The company is a co-distributor of the GlaxoSmithKline Jamaica, Dr Reddy’s, and Bunny’s pharmaceutical and health care product lines. It distributes general consumer items such as beauty, personal care and health care products. It’s a sub-distributor for Cari-Med, Kirk Distributors, Consumer Brands Limited, and Smith Russell and Company.

It operates from premises located in The Domes Commercial Complex on Hagley Park Road, with three commercial units and was founded by the Boothe family 15 years ago.