Spur Tree Spices has released its prospectus, indicating that it intends to sell 20 per cent of its ordinary shares in an initial public offering, starting on December 29, with the aim to raise over $353.3 million. The offer, which values the company at just under $1.7 billion, is scheduled to close on January 19.

The plan is to sell 353.3 million shares at $1 each. However, only 177 million will be available to general public with the rest reserved for GK Investments reserve pool, other key strategic partners including farmers who supply the business and staff of the company, who will get a portion of the shares free.

Spur Tree – a company which specialises in the production of several goods, chiefly seasonings and sauces – outlines that funds raised in the initial public offering will go towards liquidating its debt, paying for the listing and investing in the growth and expansion of the company.

Albert Bailey, CEO of Spur Tree, in commenting on the prospectus, outlines: “We have grown at a steady pace since we started operations 15 years ago and built a strong reputation for delivering high-quality products. The time is right to springboard to our next level of growth. We want to increase our operational capacity, expand our product offering and deepen our sales and marketing reach to further penetrate existing markets and enter new ones. To do this we need additional capital investment, so we are going to the market to raise funds.”

From inception, Spur Tree has focused on exports as its primary source of revenue. Its products are available in Jamaica, the United States, Canada, United Kingdom, Cayman Island, Costa Rica, and Australia through several distributor outlets.

From the prospectus it was gleaned that Spur Tree yielded revenues of more than $700 million last year, which was a 20 per cent increase over the previous year. Most of that revenue, 90 per cent, was generated from export sales. In the eight months to the end of August, Spur Tree showed continued growth, with sales expanding 28 per cent above the prior year out turn.

On its bottom line, the company recorded net profit of $70 million last year, up from $49 million in the previous year.

The push to raise additional capital for expansion comes shortly after Spur Tree acquired Exotic Products Jamaica, an ackee and callaloo packaging factory in St Thomas.

Bailey sees the acquisition as a strategic move to expand the company’s portfolio of products: “Ackee is in high demand in our export markets, so we plan to double production over the next two years. Exotic since acquisition, has recorded a solid $12 million profit before tax for the period ending in September 2021. Alongside our plans to expand our current markets, both locally and overseas, we expect to significantly improve our sales and profit performances in the coming years. This is an exciting opportunity for prospective investors to join in the growth and expansion of the company as we continue to take Jamaican flavours to the world.”

GK Capital is the lead broker and arranger of the offer, which is co-brokered by Sagicor Investments.

Applications for the Spur Tree Spices initial public offering will only be accepted electronically through the Sagicor Investments Jamaica eInvest platform.