Derrimon eyes synergistic acquisitions in New YorkFriday, June 18, 2021
Derrick Cotterell, chairman and CEO of Derrimon Trading Co Limited (DTL),is indicating that the company is thinking of acquiring new companies in New York in areas which are synergistic with the retail operations purchased earlier in 2021.
Asked if Derrimon has closed the chapter on acquisitions for now, Cotterel told Caribbean Business Report ( CBR) , “We are getting organised in NY, however, there are some other businesses that will complement our operations there. There are some opportunities we are seeing. We are always looking at opportunities that make sense so we can give investors their money's worth. There is nothing in the pipeline (immediately) now but we are not keeping our eyes closed.”
In early March 2021, the company completed the transaction to acquire control of Food Services New York, Inc and Good Food for Less for US$8.9 million.
Looking towards the future, Cotterel told CBR, “We hope to recover our investment within five years comfortably.”
A major marketing and sales drive for New York is expected to come towards the end of the year into next year.
FoodSaver New York, is a wholesale food distributor, and Good Food For Less LLC, is a specialty supermarket,whose transaction was advanced at the time of the APO, and which was expected to boost company revenue by over $400 million annually.
Derrimon incorporated a New York subsidiary, Marnock LLC, to acquire the NY-based operations. DTL indicated that FoodSaver's meat processing facility is USDA certified and serves both standard and customs cuts of meat as well as fresh fish and frozen seafood. That company has been in operation for over 23 years and is a recognised and reliable wholesale food distributor to restaurants in the New York tri-state area.
Good Food NY products are tailored to the needs of the African and Caribbean Diaspora located in the New York tri-state area.
Derrimon has sought to ensure continuity by retaining manager John Pake in New York while auditors, inventory specialists and information technology staff from Jamaica are overseeing existing systems to ensure that they fall in line with DTL standards.
For now, DTL managers are in “transition mode, ensuring the business will operate with our standard”- a process which is expected to last up to six months,” Cotterel outlined.
He said, “A lot of plans are waiting to be unleashed. Right now, the requisite controls and organisational control is being instilled. We have a strong customer service culture, which is staff taking responsibility and which may not come overnight. We have training programmes that focus on our ideals and best practices.”
The two New York operations serve a Caribbean and African market. It includes Jamaican overseas who buy from a tin mackerel to oxtail, Coterrell outlined, but the operations also cater to a broader Caribbean Diaspora which includes clients from Guyana and Trinidad and Tobago and their particular needs.
There is also a significant African market serviced. “They want the goat meat with the skin still on it and it is not unusual for one customer to buy an entire box of yams for themselves. Per capita, Africans residents in New York spend a lot more on food than the typical Jamaican,” the DTL spokesman said.
Coterrell noted as well, “A lot of [meal] ingredients are the same but there are some unique ingredients that they like.”
Fortunately, several staff members of the New York stores are African and understand these requirements. Coterrel said, “There are existing supply chains that we tap into. When we settle down we will see. You can get anything in NY once it's legal.”
Having just raised funds in January (an APO which pulled in over $4 billion), the CEO said that there are no challenges in terms of working capital.
Additionally, he noted, “Our financial partners have always been helpful. I am not going to say Derrimon will never borrow again. Hell no. We will be using bank money. No two years of Derrimon have been the same.”
Capital spend in New York includes installation of a new inventory management system, accompanied by new auditing systems for which software will be in place by third quarter 2021.
Despite the outlay, the company head said the numbers are still looking good, and promising to get better. For the planned year end marketing push, Coterrell said that there will be some social media, but the focus will be on “getting it right.”
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