Sunday Finance can confirm that recently listed company, First Rock Capital has made its first private equity investment by acquiring controlling interest in Montego Bay-based microfinance and cambio outfit Dolla Financial Services, which has operations across Jamaica and in Guyana.

The multimillion dollar transaction will also see First Rock acquiring the Guyana subsidiary, Dolla Guyana Limited, which First Rock will use as its foray into the Guyanese market, which the International Monetary Fund estimates will see economic growth of 86 per cent this year. This represents the biggest growth projected for any country in 2020.

Despite efforts to get greater details on the transaction, Jamaica Observer was advised that such details are restricted based on the confidentiality clause in the acquisition deal, which closes in 21 days.

Based on its financial standing, Dolla Financial is a profitable company which has a loan portfolio of around $300 million.

The six-year-old company is said to be doing extremely well, with seven branches spread mostly across rural Jamaica and more than 1,500 clients. In an exclusive interview with Sunday Finance, First Rock president and co-founder Ryan Reid disclosed that, based on Dolla’s latest financial results, First Rock is looking at a return on equity of about 25 per cent, which he declared, “represents real profits.”

FIRST ROCK NOT GOING INTO MICROFINANCE

When questioned whether First Rock, which is based in Jamaica and is in the business of private equity and real estate development, is now going into microfinance, Reid was adamant that this is not the case. Pointing out that First Rock has no plans to go directly into the microfinance market, Reid argued that “First Rock has merely executed private equity transaction with a company that happens to be in the business of microfinance.”

He emphasised that First Rock sees great value in this private equity transaction with Dolla Financial, whilst praising its founder and CEO Kadeen Mairs for doing “a tremendous job building the company over a certain period”.

Reid expressed the belief that this deal will give diversification and balance to First Rock while refusing to disclose the purchase price, saying this will be done when the deal is executed in 21 days.

NEW DOLLA FINANCIAL BOARD

When asked whether there would be changes to the board of Dolla Financial upon closure of the transaction, Reid answered in the affirmative. He disclosed that the new board will be headed by retired veteran banker, Jack Shirley as executive chairman.

The other members of the new board will be entrepreneur Phillip Martin, who was a former director of Scotia Investments; Marjorie Seeberan, retired banker and former head of corporate banking at NCB; First Rock’s in-house legal counsel, Jordan Chin, who will sit in an executive capacity; First Rock Assistant Vice-President of Finance Sean Myers, as well as Ryan Reid.

The current CEO of Dolla Financial, Kadeen Mairs will also be on the new board.

Referring to the new board, Reid explained that the plan is to create a structure akin to a financial institution that is in the business of lending.

According to the First Rock boss, “As you noticed, we have brought in retired bankers who understand banking standards, etc. We want to bolster the operations as we seek to expand.”

He singled out the law firm of Matthew Hogarth for the legal work done in executing the deal, and was particularly appreciative of Bazil Lee, who was the attorney who handled the process.

THE SHOPPES AT ROSE HALL ACQUISITION DROPPED

When asked about some of the pipeline projects that First Rock reported in its prospectus for its successful initial public offer last month, Reid announced that the planned acquisition of The Shoppes at Rose Hall in Montego Bay will no longer be pursued.

He disclosed that the change was due to new information, based on the company’s due diligence regarding the proposed acquisition.

“The due diligence never came out to our satisfaction so we are no longer pursuing,” Reid concluded.