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Proven selling its shares in Knutsford for $220m - ... set to double its investment

Published:Wednesday | December 23, 2015 | 12:00 AMSteven Jackson
A Knutsford Express bus.

Proven Investments Limited has agreed to sell its 20 per cent stake in Knutsford Express Limited, the cross-country luxury-bus service, for some $220 million, a move that will allow it to double its investment in the company.

Sources indicate that a large investment house has acquired the shares in the fourth-largest block transaction on the junior market of the Jamaica Stock Exchange (JSE) in seven days.

"The transaction will occur [shortly]," Chris Williams, chief executive officer at Proven Management Limited, told Wednesday Business in a telephone interview yesterday. "It's a good deal. Our mandate is to identify opportunities and to execute on them," he added.

Proven Management operates as the investment manager for Proven Investments Limited, which holds a number of entities in its portfolio, including the stake in Knutsford Express.

In November 2014, Proven announced that it had acquired additional Knutsford Express shares, which bumped up its stake to 20 per cent or about 20.4 million shares. It acquired that block of shares for some $5 per unit and will sell at between $11 and $12.

"It will be sold for between $200 and $220 million from about $100 million in value 18 months ago," said Williams.

He declined to reveal the identity of the buyer, but said they were approached on the offer.

"We decided to take the offer," said Williams. "We will prepare for an aggressive 2016 when we will hunt for more deals. We are going out swinging. We are now realigning our portfolio to back another entrepreneur."

Proven Investments made US$1.57 million in net profit on revenues of US$5.5 million for the three months ending September 2015, or 23 per cent higher than a year earlier.

"We expect Knutsford to continue doing well. We are happy with our investments. It is what we do," reasoned Williams.

Proven acted as the lead broker to the listing of Knutsford Express on the junior market in January 2014. At that time, Proven acquired a 10 per cent stake, equivalent to some 10.2 million shares. As at September 2014, Proven increased its holding to 15 per cent, according to information provided in its financial report. Finally, in November 2014, roughly five million shares were traded, data provided by the JSE show.

Knutsford Express, led by chief executive officer, founder and majority shareholder Oliver Townsend, raised about $100 million from its initial public offering. The bus company holds some $250 million in equity as at August 2015. It earned $35.6 million in net profit on revenues of $143 million for its first quarter ending August 2015, or nearly double the profit levels a year earlier.

steven.jackson@gleanerjm.com