Proven won't seek majority control of Access
2015 focus: Consolidating new acquisitions
Proven Investments Limited will not be going after majority ownership of Access Financial Services Limited, but is content with the 49.27 per cent of the company acquired in December for US$10.69 million, says Christopher Williams, president and CEO of Proven Management Limited.
The deal with Mayberry Investments Limited was struck at J$9 per share or J$1.2 billion.
Williams said on Monday that his company was satisfied as owner of a plurality of Access' shares; that the current holdings was sufficient to wield influence over the company. Marcus James, founder and CEO of the 14-year-old company, is the second largest shareholder.
Proven's purchase of the microfinancing asset wraps up a year of new investments, including a 32-unit apartment complex under development, the acquisition of the operations of First Global Financial Services (FGFS), and a larger stake in transport company Knustford Express.
The last six months saw the "slimming down" of the operations of FGFS, which was renamed PWL Transition Limited, and the honing of its operations to fit with the Proven model, said Williams.
A similar right-sizing will not be necessary for Access, he said. The new acquisition is seen as a "perfect complement" to Proven's microlending subsidiary, Asset Management Company Limited (AMCL).
AMCL, which trades as eZEE Loans Limited, provides hire purchase finance to companies, including Appliance Traders Limited and Khemlani Mart.
AMCL is worth about J$500 million by assets, said Williams, and Proven has been seeking opportunities to leverage its asset base.
"The opportunity with Access came up. The plan is to put the two platforms together," he said.
Asked what other assets he might be chasing, Williams said Proven has been approached by several prospects, but while he did not rule out any deals, he said the company sees 2015 more as a time to consolidate its current holdings and focus on profitability.
"The acquisitions are not a priority right now. The priority right now is to consolidate acquisitions of 2014 to the bottom line," he said.
"Our end goal is to drive earnings per share, and that is what we are going to be focusing on in 2015 to ensure that the moves made in 2014 translate into a stronger, more stable bottom line. That is my mandate from my board ...".
Although it would take an additional stake of less than one percentage point to takeover Access, Williams said Proven does not intend to take that step, but expects that its influence will soon become evident to shareholders.
"You demonstrate control of a company through performance. As long as shareholders are comfortable with your performance, then they will typically go with whatever recommendations you have. We are comfortable where we are. We do not need to go any further," he said.
"We need to move away from the perception of having a majority position as opposed to control through performance. That's what's we aim to establish. We are working with our CEO Marcus James to achieve this."
He reiterated that Proven was comfortable with James as head of the company. Since April 2014, James has been embroiled in a legal fight with Mayberry-connected directors as well as the chairman of Access Financial over his stewardship of the company.
"We have endorsed him. We are comfortable that he can protect and in fact grow our investment. We have made a significant investment and we are comfortable that he can protect and grow it," Williams said of James.
Access Financial's performance remained strong amid the imbroglio. At September, the company's asset base expanded to J$1.37 billion, and loans to J$1.12 billion.
Nine-month revenue climbed by J$185 million to J$725 million, while earnings per share rose to 87 cents from 73 cents, year on year.
Proven had total assets of US$332 million (J$37 billion) at September 2014. The merger of the operations First Global Financial Services with Proven Wealth Limited, Williams said, has significantly strengthened the company's balance sheet and "more importantly that has put us as a significant player in the lucrative pension fund management space with the management of in excess of J$32 billion in pension assets," he told Wednesday Business.
"Within the last six months we have been able to significantly downsize the operations of the former company and merge the client base into the Proven Wealth structure, resulting in significant cost savings."
The downsizing included the sale of a real estate property in Newport West, Kingston, which was "not a strategic fit", for just over J$100 million.