Family-owned pharmaceutical distributors, R A Williams Distributors Limited, is opening its books to external shareholders as it seeks to raise funds to settle some $306 million in debt owed to banks and the estate of late Chairman Raby Danvers “Danny” Williams. Concurrently, it’s seeking cash to springboard growth plans.

Altogether, the St Catherine-based pharmaceutical distributor is seeking to raise $400 million in new capital, which, apart from settling its debt, including short-term Sagicor Bank Jamaica loans, it said it also intends to put $46.35 million towards working capital and solar equipment at its New Brunswick Village, Spanish Town, operating facility and pay the fees related to the initial public offering (IPO). The IPO is priced at $1.00 per share and the company needs to raise a minimum of $265 million for the offer to be successful.

“RA Williams’ decision to go public marks a significant milestone in our growth journey. We have been a trusted name in Jamaica’s distribution industry for over a decade, offering a wide range of high-quality products to various sectors. Our commitment to customer satisfaction and efficient service is backed by a dedicated team and a robust supply chain network. We are also deeply invested in corporate social responsibility, actively supporting community development and philanthropic initiatives. This IPO will enable us to expand our operations and enhance our ability to deliver unique pharmaceutical products to a wider market, and I’m looking forward to its success with Sagicor Investments at the helm,” said Audley Reid, CEO of R A Williams Distributors in a press release.

RA Williams was registered in October 2009 but began operations in 2010. The company began operating with a small retail pharmacy in Chapleton, Clarendon, before switching to a full-service pharmaceutical distributor at Brunswick Avenue, Spanish Town, St Catherine, in 2012. R A Williams now distributes for pharmaceutical manufacturers such as Aristopharma, Square Pharmaceuticals, Indus Life Sciences, IPCA Labs, MSN Labs and Aculife.

From left Jewel Reid, COO and Audley Reid, CEO of R.A. Williams Distributors Limited.

Of the 400 million ordinary shares on offer, 210 million will be made available to the public, while the other 190 million are reserved for other applicants. Of the reserve shares, 30 million are set aside for R A Williams’ 70 current employees; former employees, at the director’s discretion; plus directors on the company’s current board; and members of the advisory board. The other 160 million shares will be made available for key strategic partners, such as existing customers of the company, consultants, suppliers, Sagicor Investments Jamaica Limited, and managed funds of Sagicor Life Jamaica Limited. The offer opens on July 17 and should close two weeks later on July 31. The company’s issued share count would rise to two billion ordinary shares if the offer is successful.

Ranwill International Holdings Limited, a company owned by Evelyn Williams, Audley Reid, and Jewel Reid, is the largest shareholder in R A Williams, with a 49.37 per cent stake. This is followed by Jorden Investments Limited, a company owned by Chairman John Bailey, and Ravers Limited, a company owned by the estate of Danny Williams, with each owning 24.69 per cent each. Eleven other shareholders own the remaining interest in the company. These ownership stakes are set to change following the IPO.

R A Williams has seen its revenues move from $421.9 million in April 2019 to $1.41 billion in April 2023 as it grew its customer base and product range. Its operating profit also moved from $49.70 million to $161.21 million over the same period with profit before tax increasing from $44.50 million to $123.04 million.

For the unaudited 2024 period, R A Williams’ revenue improved by six per cent to $1.50 billion, with gross profit jumping 17 per cent to $693.15 million. This translated to its gross profit margin moving from 42.12 per cent to 46.31 per cent. However, operating profit was cut by 17 per cent to $133.51 million due to a 30 per cent rise in operating expenses. Profit before taxation was down 21 per cent to $97.59 million, with net profit decreasing 14 per cent to $84.65 million.

If R A Williams’ offer is successful in garnering $400 million in subscriptions and is admitted to the Junior Market of the Jamaica Stock Exchange (JSE), it would benefit from paying no income tax for five years, after which it will pay 50 per cent of the applicable rate in the other five years. The company would also become the 55th company to list on the Junior Market to date, but with six graduating to the senior market, it would be the 48th company listed on that index.

The company recently concluded negotiations with Fourrts (India) Laboratories Pvt Limited and Mankind Pharma Limited which will see the introduction of new treatment options in areas that require treatment with anti-infectives and dermatological options. This is part of its strategic plan to continue building strategic relationships with key suppliers which will support their new operating facility with 21,000 square feet of operating space.

R A Williams’ growth plans will be up against the likes of listed firms Indies Pharma Jamaica Limited, Lasco Distributors Limited and Medical Disposables and Supplies Limited. They will also be competing against Cari-Med Group Limited, Facey Commodity, Massy Distribution (Jamaica) Limited, and Medimpex. It should also be noted that Trinidadian-based Agostini’s Limited has entered the Jamaican space following the acquisition of Health Brands Limited in 2023.

R A Williams intends to have a dividend policy of paying up to 25 per cent of distributable net profits, subject to the need for reinvestments once listed.

The board of directors includes Chairman John Bailey along with Evelyn Williams, Audley Reid, Jewel Reid, and independent directors Dr Tonoya Borrows, Dr Marjorie Fyffe-Campbell, and Douglas Lindo. The company has applied to the JSE to have the mentor requirement waived but would appoint Dr Fyffe-Campbell if its waiver is unsuccessful. Directors currently receive a fixed $1.5-million annual fee.

Interested investors can apply for the offer through SIJL’s eInvest platform (einvest.sagicorjamaica.com) up to the scheduled closing date of July 31. The minimum number of shares to be applied for the offer is 1,000 units while increments will only be done in multiples of 100 units. The JCSD processing fee of $172.50 is payable with an application.