Agostini’s Limited is planning to make a big splash in the Jamaican pharmaceutical distribution market following its TT$139.32-million (J$3.17-billion) acquisition of Health Brands Limited in August.

Anthony Agostini, Agostini’s managing director, penned to the Jamaica Observer in August that the company would be moving to expand the offerings of Health Brands over time to improve health care product availability to the Jamaican public. This was in addition to the Health 2000 Canada, Asopharma, Merck Sharp, Rexall Sundown and Ferring brands that they currently supply to the market.

Nearly five months later, the Trinidadian conglomerate has started to make its strategic moves known as Health Brands which will now be distributing products manufactured by Carlisle Laboratories Limited on January 1. Agostini acquired Carlisle Labs in December 2022. Some of the products to be distributed include the well-known Histal, Histatussin, Dica and Caribe Balsam products which are staples on most pharmacy shelves.

“During the 2023 fiscal year, our pharmaceutical and health care group delivered strong results, attributed to a robust performance across our key subsidiaries in the segment. Additionally, our acquisition of Health Brands in Jamaica has extended and solidified our regional presence as we continue to execute on our regional pharmaceutical and health-care strategy,” said Agostini’s Chairman Christian Mouttet in his shareholder’s report for the 2023 financial year ended September 30.

The Carlisle brands are distributed by a large Jamaican pharmaceutical distributor whose parent company is also listed on the Trinidad & Tobago Exchange (TTSE). Health Brands reach has also improved over the years as it’s gone from supplying 11 drugs to the National Health Fund in 2015 to 41 drugs in early 2023, which includes products such as ibuprofen tablets.

While former owners Athol Smith and Kathleen Russel will no longer lead the pharmaceutical and personal care distributor, Agostini’s has snapped up GraceKennedy Limited’s former Chief Supply Chain Officer Glenise Durrant Freckleton who started the new job as Health Brands chief executive officer on October 1. This signals the company’s intents to aggressively grow the business in a key market for any serious Trinidadian business looking at regional expansion.

When asked by the Caribbean Business Report if the company has any other possible acquisitions lined up in Jamaica, the managing director noted that it wasn’t on their radar at the present time but noted that it would integrate further Agostini controlled brands once they fit the particular segment.

“It was a strategic acquisition. The plans are to understand the Jamaican market and to institute plans to grow the business. In due course, once it’s in the pharma and personal care areas,” Agostini added.

Agostini’s board of directors also includes Joanna Banks, the former president of private equity firm Pan Jamaica Group Limited before her current switch to Sagicor Group Jamaica Limited as executive vice-president for strategy and business.

Health Brands was formed in March 1975 under the name Medi-Grace Limited, a subsidiary of GraceKennedy. It was sold in August 2006 to Smith Russell & Company Limited for $98 million. Athol Smith was a former senior general manager in the merchandise division at GraceKennedy who resigned in 1992 as he began his distribution company Consumer Brands Limited. Smith sold Consumer Brands to GraceKennedy in August 2017 for $1.11 billion, a discount relative to the $1.53 billion of net assets that GK acquired.

The Health Brands sale means that Smith would have realised 31.35 times his initial investment in August 2006. It is also notable that Agostini’s (Jamaica) Limited, the holding company used to complete the transaction, paid TT$77.96 million (J$1.77 billion) in goodwill above the TT$61.36 million in net assets acquired, the highest premium for any of its 2023 acquisitions. Agostini’s (Jamaica) contributed 14 per cent as direct equity to the deal while the remaining TT$119.92 million was financed by The Bank of Nova Scotia Jamaica Limited.

Agostini acquired the Collins Group, which includes Collins Limited, Carlisle, Coem Limited and Lambou Investments Limited, on December 1 for TT$296.04 million and bagged a TT$102.19-million gain on acquisition on its income statement. It also directly acquired Process Components Limited for TT$78 million and 80 per cent of Chinook Trading Canada Limited for TT$75.05 million under Caribbean Distribution Partners Limited, its joint venture with Goddard Enterprises Limited. Agostini’s is currently integrating these subsidiaries in order to pursue growth opportunities across the region.

Agostini’s is currently developing warehouses for rent in Guyana with the construction and acquired a 25 per cent stake in PAUW Developers Inc in September 2022.

These acquisitions ended up fuelling Agostini’s top line growth by 14 per cent to TT$4.68 billion (J$107.08 billion) with three-fifths coming from Trinidad and Tobago. The Barbados segment, which benefited from 10 months with Collins Group, saw revenue grow 94 per cent to TT$759.37 million with the remaining revenue coming from other Caribbean islands and Canada. Agostini’s operating segments include pharmaceutical and health care, consumer products and energy, industrial and holdings.

Although operating expenses increased, operating profit grew 15 per cent to TT$482.86 million. With a TT$84.89 million gain on acquisition, consolidated net profit climbed 48 per cent to TT$393.13 million, with net profit attributable to shareholders rising 64 per cent to TT$313.36 million. Earnings per share was TT$4.53.

Total assets grew 26 per cent to TT$4.21 billion with current assets at TT$2.22 billion, inclusive of TT$1.09 billion in inventories. Total liabilities and equity attributable to shareholders closed 2023 at TT$2.04 billion and TT$1.70 billion, respectively.

Agostini’s stock price closed Thursday at TT$68.50, which leaves it up 37 per cent year to date with a market capitalisation of TT$4.73 billion. This means that Agostini’s price to earnings ratio is 15.12 times. Agostini declared its largest dividend to date of TT$1.10 totalling TT$76.01 million to be paid on February 1 to shareholders on record as of December 29. This brings the annualised dividend to TT$1.50 and translates to a dividend yield of 2.19 per cent.

Anthony Agostini will be retiring from the company and board at the conclusion of the company’s annual general meeting (AGM) on January 31, with CEO designate Barry Davis to be appointed chief executive officer on February 1. Agostini has served on the board for 33 years and as managing director for 18 years. His retirement comes as he recently attained the age of 70, which is when director’s need to retire from the board. The AGM will be held at 10 am by the Hyatt Regency Trinidad.

“As he passes the torch, the legacy of Anthony’s leadership is evident in the group’s transformation from an entirely Trinidad & Tobago-based business to a regional group with operations in eight countries and exports to 23 markets. His unique ability to steer this company with a blend of familial warmth, gentlemanly demeanour and operational diligence has left an inedible mark on our corporate narrative and identity. We stand in gratitude for the immeasurable contributions he has made, and while his daily presence will be deeply missed, his legacy will continue to inspire and guide Agostini’s in our future,” Mouttet closed.