MASSY Holdings has announced its intention to acquire IGL, using its Massy Gas Products Holdings subsidiary to effect the deal.

The Trinidad-based company said its board on Monday approved the acquisition of IGL for US$140.3 million through a share purchase agreement with the entity’s parent company, Caribbean Petroleum Marketing Limited (CPML). CPML owns 100 per cent of IGL, which is registered in St Lucia as IGL (St Lucia) IBC but operates in Jamaica. The transaction is subject to regulatory approval by the Jamaica Fair Trading Commission based on the market size of both players in the liquified petroleum gas (LPG) market.

The producer of industrial and medical gases, as well as distributor of LPG, has been in operation for the last 60 years.

Massy Holdings said the acquisition of IGL (St Lucia) IBC Limited from Caribbean Petroleum Marketing Limited is part of the gas products portfolio growth strategy for its LPG and medical and industrial gases business operations in Jamaica. Currently, Massy Gas Products operates the GasPro LPG brand in Jamaica, which it acquired from Royal Dutch Shell in 2006.

If the acquisition of IGL is approved it will increase Massy’s group assets by 7.3 per cent and will contribute to an increase in the group’s profit of approximately 7.1 per cent.

For the gas products portfolio, the acquisition is expected to increase its profit before tax by almost 30 per cent.

When asked about the potential for layoffs relating to the acquisition, at the company’s annual general meeting (AGM) on Wednesday, interim Chief Financial Officer Vaughn Martin said, “Currently, in Massy Gas Products (Jamaica), we have approximately 100 staff. We see that the acquisition actually complements the work that we do, and I think it’s a massive opportunity for us to utilise both businesses to go into bigger business. We see no opportunity to lay off staff at all.”

Massy also held a staff meeting on Wednesday to discuss the acquisition with its employees.

However, at its AGM the Massy executive also told the Jamaica Observer: “At this point in time, for the gas products portfolio, we’d like to consolidate this business, and we’ll extract the real value that we see in the business. That’s the first step that we’d like to take on. We’re not really looking at any other opportunities in Jamaica at this point. There may be opportunities for opportunistic acquisitions. We look at them as they come but right now the focus is creating the value and exerting the value from this transaction,” Martin closed.

Martin also added that Massy was the leader on the bulk LPG side of the market while IGL leads on the packed side in Jamaica.

Massy earlier this year indicated that it wants a bigger slice of the Jamaican gas market and has increased the capacity of its LPG storage tanks.

The IGL announcement is the third acquisition Massy communicated to the market this month.

It announced on December 5 that approval was given to its management to acquire Air Liquide Trinidad and Tobago, through its Massy Gas Products Holdings subsidiary, for a price which could reach US$58 million. Air Liquide is a producer and supplier of industrial gases in Trinidad and Tobago.

Last week Massy Holdings announced it purchased Jacksonville, Florida-based Rowe’s IGA supermarkets for US$47 million. Rowe’s IGA, which was established in 2005, operates seven supermarkets in Jacksonville.