Portland Caribbean Fund backs Melville company - US$8m deal to drive regional expansion
Diverze Assets Inc, a holding company with ownership interest in Chukka Adventures, Tropical Battery and other Jamaican assets, has become the sixth investment for a regional fund under the control of Portland Private Equity (PPE).
The Melville family-owned firm has received funding for expansion that is meant to position Chukka Adventures and Tropical Battery as "regional leaders," according to Diverze Managing Director Alexander Melville in a statement on the transaction.
Portland's negotiating team was led by Ricardo Hutchinson who recently joined the private equity firm and anchors its Jamaica operations.
Hutchinson told Gleaner Business that Diverze received US$8 million of financing and that the deal was structured to allow PPE to make additional investments in the company, should the opportunity arise.
"Portland made a minority equity investment structured to provide strong alignment with the Diverze shareholders," he said, adding that Diverze currently has about US$30 million in assets.
Portland has not said how big a stake it now has in Diverze. The deal was transacted through Portland Caribbean Fund II.
The expansion "plans are currently being finalised, however, both companies will be concentrating on efficiency improvements and build out of current locations over the next 6-12 months," Hutchinson said.
Chukka, which describes a period of play in a polo match, was named by founder Danny Melville. The company started in Ocho Rios in 1983 with horseback Ride 'N' Swim described as the first adventure tour of its kind in Jamaica, and which remains its signature tour, according to Chukka's website.
The adventure company is already a regional player. It operates over 60 tours in Jamaica, Belize, and Turks & Caicos, featuring ATV or dune buggy rides, zipline canopy, rum tasting, river experience (tubes/kayaks), terraced waterfalls, waterslide, challenge course, bird aviary, swimming pool, gem mining, and a Great House tour.
None of the Melvilles were reached for comment.
According to Hutchinson, Chukka is currently chaired by Paul Hanworth, the chief operating office for PanJam Investment. PanJam, a property and investment conglomerate, acquired 20 per cent of Chukka Adventures in 2012.
Tropical Battery Company, now headquartered on Ashenheim Road in Kingston, was founded in 1950 by American Businessman Tex Williams but purchased in 1967 by John Melville, father of Danny Melville. The company originally started as a manufacturer of lead acid storage batteries, but changed its business model from manufacturing to distribution in the early 1990s.
Its core business continues to be automotive batteries and distribution of local and imported automotive consumer product brands. Tropical has distribution centres in Kingston and Montego Bay to serve the Jamaican market.
Diverze Assets is the sixth investment for the US$200 million Portland Caribbean Fund II and its first in a Jamaican held outfit.
The other five and funds invested are: CVBI, a company associated with Liberty Global $30 million; IEH Penonome Holdings US$15 million; Clarien Group Limited US$10 million; InterEnergy Holdings US$25 million; and Grupo IGA US$17 million.
Describing the recent transaction announced June 19, PPE Managing Partner Rob Almeida said in the statement that Diverze "is an example of the type of growth businesses in the region which can benefit from PPE's owner/operator culture, regional networks, and investment capital."
Hutchinson who is Vice PresidentInvestments at PPE, will be joining Diverze's board. As for PPE's next move, he said a seventh investment by Caribbean Fund II will be announced shortly.