When opportunity strikes, go after it and don't look back. While it may take time for you to scale up, the dream isn't as far it may seem. That's the focus of this week's Corporate Profile as Productive Business Solutions Limited recaps its journey from one acquisition to a US multimillion-dollar regional business.
The year 2001 was a very peculiar time for Jamaica. Barbados Mutual Life Assurance Society had just acquired Life of Jamaica (now Sagicor Group Jamaica), National Commercial Bank Jamaica Limited (NCBJ) was a subsidiary of the Financial Sector Adjustment Company (FINSAC), businesses were going under, debt to gross domestic product (GDP) surpassed 100 per cent and unemployment was above 14 per cent.
However, the Desmond Blades-led Musson Jamaica saw an opportunity to diversify its reach and capitalised on it through the acquisition of Xerox Corporation's Jamaican assets and business. The resulting acquisition saw the creation of the business solutions division among its food manufacturing and financial businesses.
Through a joint venture between Musson and its affiliate Seprod Limited, with a capital contribution of $113.35 million each, Xerox's operations in Aruba, Curaçao and the Dominican Republic were acquired in May and October 2004. This was achieved through PBS which isn't just the acronyms for Blades grandson and current Chairman Paul Barnaby Scott, but for that of Productive Business Solutions Limited which is a Jamaican company. PBS' operations were listed as the provision of document management services.
PBS would eventually land its first multi-billion-dollar deal in May 2005 when it struck a deal with French multinational company Nippon Electric Company (NEC) to be the exclusive distributor of Nippon's products in the Caribbean and Latin America. NEC was approach by PBS to distribute its products in the region at a time when they weren't looking at the region to distribute information technology (IT) products. NEC was a world-famous manufacturer of software products and wholesaler of computer peripherals.
While PBS continued to build scale on its own, the Musson team saw an opportunity to build a regional mecca in the IT space. As a result, they had Facey Commodity Company Limited (FCCL) acquire a 51 per cent controlling stake in Grupo Difoto in 2006 which was the exclusive distributor of Xerox products in Guatemala, El Salvador, Costa Rica and Panama and a distributor for NCR and Sony medical imaging in Guatemala. FCCL also acquired Springer Clarke Business Machines Limited which was the owner of Barbados Business Machines Limited (BBM), a distributor of Xerox products and other brands.
FCCL set up Global Products Alliance, Inc (GPA) in partnership with Difoto in Miami, Florida. This would continue the Xerox aligned focus as GPA began distributing low-end printing and technology equipment and parts from Miami into the Caribbean and Central American region through in-country sub-distributors. Facey Group, through Wight Properties Limited, acquired PBS and CBM Limited from Seprod for US$8 million as it worked closely to integrate the businesses with Difoto and BBM.
During 2008, in the middle of the financial crisis, Facey Group acquired Xerox's Nicaraguan operations and 40 per cent of Cayman Business Machines Limited. Facey acquired the remaining interest in Difoto to make it a wholly owned subsidiary in 2009 with Difoto opening a Belize office in 2010. Pedro M Paris Coranado was appointed chief executive officer at the end of 2009 after joining the company in 2003.
Despite the success of scaling the various businesses through acquisitions, there was no clear synergy present as each of the 14 subsidiaries operated with various multinational clients, but with different names, systems and procedures. With the wide variety of businesses under its umbrella, the Facey Group formed three distinct arms for each business line. As a result, PBS was incorporated on December 16, 2010, in Barbados as an international business company (IBC) with the original PBS formed in Jamaica becoming a subsidiary of this business.
PBS went on to acquire Facey Group's business solutions and technology distribution subsidiaries to form the largest business solutions provider in the Latin American and Caribbean. It is the largest distributor for Xerox products in the western hemisphere and distributes for Cisco, Oracle, Trip-Lite, Engatel, L3 security systems, Dell and Google among many others. PBS listed on the Jamaica Stock Exchange and Barbados Stock Exchange in August 2017 in what was the largest initial public offering at the time.
"PBS has a very comprehensive portfolio and was the result of several acquisitions over a period of time. We have certain strengths in one country and my ambition is to replicate the best practices from that country into another. PBS is in the life of the people," said Paris in an interview with the Business Observer.
He described PBS through the acronym PRINTS which not only represents their US$12.91-million printing segment, but through the wide range of business lines PBS currently offers. 'PR' stands for printing, 'I' for imaging, 'N' for networking, 'T' for (information) technology and 'S' for security and services. All of these business lines generated a combined US$224 million in revenue in 2021.
While many readers might not immediately grasp where PBS fits into their lives, one can look at the back of their ATM (automated teller machine) receipt, look at the scanning tools used at international airports, the iPhone you probably purchased from an authorised reseller or the transaction you just paid for on a NCR branded point of sale machine. Before FirstCaribbean International Bank Limited discontinued their ATM cards in 2021, one could find the letters 'PBS' on the back of the card. These are all services PBS provides or maintains on behalf of their clients which forms part of the digitally integrated society we live in today.
Notable PBS transactions include the Barbados national identification project, the Jamaican national identification systems (NIDS) and security installations at the Punta Cana and Sangster International Airports. Apart from distributing goods and services, PBS also has been given professional recognition in Amazon Web Services, a Lenovo platinum partner and Hewlett-Packard as a platinum partner.
"Although there is this cliché that we don't need paper anymore or printing because it's going to be replaced by digitalisation workflows, our company has more than 30,000 devices in the region. We're going to go after our competitors to grow that number of devices. The 14 most complex printers in the regions were sold by PBS and they contribute to colour printing in space of graphic commercial printing and textbook printing," Paris explained about the future of printing after the pandemic struck.
While the printing equipment segment hasn't returned to pre-pandemic levels, the company is remaining adamant about the opportunities which lie ahead with the world returning to normal. The segment includes the use of X-ray devices at Guatemala's ports where more than 20,000 containers are scanned every month and US$7 million in textbooks printed for education.
"Printing is not over, it's just transforming. We're now doing labels for certain institutions and it's a different printing technology with a different substrate. PBS is a strong ally of the largest technology institutions to achieve their goals in the region," Paris added.
The pandemic created a new opportunity for PBS as Dell and Google entered the region as the governments and companies ramped up their digital investments to catch up with the realities facing them at the time. The revenue from these two partnerships is in the range of US$30 million which is a 10th of their 2022 US$300-million revenue target. They also partnered with Akamai to assist in the delivery of cybersecurity.
PBS currently boasts 2,200 employees across 19 countries with 500 team members after the acquisition of PBS Technology Group Limited in September for US$53.96 million. It is also aiming to expand again this year with another set of acquisitions to further bolster its business across the region.
"PBS is the leading technology company in the region with the best and most complete portfolio in the space. I think PBS is a great place to work and have a career. To the everyday person, they touch PBS products and services every day without knowing when they go to a bank, supermarket, airport or use their credit cards. PBS is a crown jewel of the Musson Group because of the reach in 20 countries, so the risk is very balanced," Paris closed.