Barita finances Jamaican company takeover of US real estate entitiesFriday, January 14, 2022
BY DASHAN HENDRICKS
ECOMMERCE Property Services has acquired three United States-based tech driven real estate services companies and now eyes listing on the Jamaica Stock Exchange “in the next 12 months.”
Ecommerce – a Jamaican company – made the acquisition with the help of Barita Investments. The cost of the transaction was not disclosed.
Ramon Small-Ferguson, executive vice-president, Asset Management & Research at Barita Investments, would only tell the Jamaica Observer, “We have given some idea of the size and standing and the nature of the business the entities do and where they stack up in terms of this industry in a very large market, so that will give you and idea of the size of the transaction.” However, it was noted that the deal will result in profits of the entities being repatriated to Jamaica, in a reversal of roles whereby in the past the opposite would happen.
A release from Barita Investments said the larger of the three companies, Robert Slack Fine Homes LLC, a property purchase/sale brokerage firm, is expected to have combined property sales exceeding US$2 billion (over $300 billion) for the financial year 2021.
Details about the other two companies, Florida Funding LLC – a mortgage brokering firm and Florida Title LLC – a titling and transaction settlement provider, were not released. Small-Ferguson only told the Caribbean Business Report, “The other two companies are complementary to Robert Slack.” He, however, said further details on the company, the owners and plans will come out soon.
The three US-based companies were previously primarily owned by Robert Slack and Walters, who now, according to the release, own a stake in Ecommerce as part of the transaction.
Small-Ferguson said, “We arranged a full capital stock for the acquiring entity, so we would have given them some senior debt, we gave them some mezzanine financing and they would have also come with equity.”
He added: “This is phase one and phase two will see them doing a public listing that will essentially see them rebalancing their capital structure. As to exactly how it will be rebalanced, I can't say at this point time, but that's how they intend to use the JSE, to rebalance the capital structure.”
“Subject to the receipt of all directive and approvals from all relevant authorities, be it the regulators or otherwise, and obviously in consultation with the client, who is ultimately going to be leading this project, we expect to potentially avail this opportunity to the public in the next 12 months.” he added.
Small-Ferguson, however, declined to say how much money Barita used to finance the deal and how much equity the principals hold in the company. Barita, however, expects to recoup its investment when the company goes public.
“In terms of the debt that we would have extended to them, we expect to recoup some or all of that debt, it's acquisition financing and acquistion financing is never permanent,” Small-Ferguson said.
It was also outlined in the release that all three companies are now well resourced and positioned to continue and accelerate its expansion across the United States.
However, Small-Ferguson while pointing out that the principals of Ecommerce will provide more information on their plans, said Barita “hopes to partner with the entity and any other entity on their expansion plan.”
Terise Kettle, vice-president, investment banking at Barita, added, “The innovative structure that was arranged and executed by Barita's Investment Banking and Structured Finance teams will form the basis for similar transactions to be pursued in North America. This transaction has provided us with the opportunity to pursue other partnerships in the lucrative North American market as we seek to execute our local and regional expansion strategy.”
According to Real Trends Mega Teams rankings, in financial year 2020 Robert Slack LLC had the third-largest real estate brokerage mega team in the US by transaction volume and second by transaction value. It has experienced significant growth within the last six years. Since the financial year 2015, it has grown from selling real estate valuing a total of US$46 million with just 43 agents on 256 transactions to US$1.5 billion (approximately $232.5 billion) in sales from over 600 agents on 5,198 transactions during 2020. As of October 2021, the team consists of 711 agents and 300 back-office support staff members across multiple countries such as Venezuela, the Philippines and the US. In 2021, it expects to sell US$2.2 billion (approximately $341 billion) in homes in Florida alone. The company currently only operates in Florida but has recently made tangible steps to expand across the US.