Young entrepreneurs to list overseas-based company on local stock exchange
Keisha Hill, Gleaner Writer
Keystone Augusta Inc is a private investment diversified holdings company based in Orlando, Florida. The company was founded by brothers David and Robert Mullings and friend Kirk Anthony Hamilton in 2012 with the objective of buying under-valued companies that sell services or products to Fortune 1000 firms in the United States.
The company is part-owned by The RMP Group, which was founded by successful private equity investor Richard M. Powell. After years of studying Warren Buffet, the Mullings brothers et al, decided to create a 'Berkshire Hathaway' model, according to Forbes Global 2000 list, the eighth-largest public company in the world.
"We decided to create a Berkshire Hathaway for our generation, to create wealth for our shareholders, to do good and to give back to society, especially the countries that have shaped our lives. We intend to inspire people to go after their big audacious goals," Mullings told The Gleaner when he visited the company last week.
The Berkshire Hathaway model is where the company is publicly traded, capital is used for acquisitions and all shareholders benefit from value creation and capital appreciation. Keystone will allow the average person to participate in private-equity deals starting in North America.
For investments in the USA where Keystone acquires 51 per cent or more they will be able to get the companies Minority Business Enterprise (MBE) certification through the National Minority Supplier Development Council.
"This provides advantages in securing business from Fortune 1000 firms and the United States Government as most have mandates for approximately 20 per cent of their annual spend to be with MBEs. Keystone Augusta will be one of the only investment firms run by minorities and operating in the middle-market space," Mullings said.
Keystone Augusta is now trying to acquire up to US$2 million for 10 per cent of the company in order to execute deals that have already been negotiated. The company will then list on the Jamaica Stock Exchange as a USD stock, giving shareholders liquidity.
"Keystone will then issue preference shares to raise more capital to complete the acquisition of a profitable mobile app business in the USA and get it MBE-certified. We also intend to list on the Toronto Stock Exchange within 12 months to give Canadian investors the same access, while also having access to a larger and more liquid exchange," Mullings said.
According to Mullings, Caribbean-based investors need opportunities to diversify their holdings away from local currencies, companies that are very dependent on the economic situation in individual Caribbean countries and want to participate in private deals with tremendous value creation such as with ZeroChaos.
"Currently, this can only be done by participating in a private-equity fund and meeting the minimum requirements to be able to invest, usually US$100,000 to participate. These funds are not liquid and require holding periods usually of years," David said.
The first investment Keystone Augusta has made is in a US-based company called Crunchy Logistics. This company has been ranked by Inc magazine's September issue as one of the 500 fastest-growing privately held companies in the United States, ranking number 193 with a three-year revenue growth rate of 1,837 per cent.
"Our plan at the outset is to buy, hold and grow. We are not a private-equity firm. We do not buy with the intention to sell. We are willing to look at companies that cater to the growing middle class especially in Latin America, that also have a similar market as India," Mullings said.
Keystone is the name of the area in Spanish Town in the parish of St Catherine, Jamaica, where Mullings' family first lived and where they met the Powell family whose children, Richard, Josef and Dominic, would become great friends and would heavily influence their business trajectory in life.
While Augusta comes from Fort Augusta in St Catherine, Jamaica, which was built in the 1750s and named in honour of King George III. This fort guarded the western end of Kingston Harbour, the seventh-largest natural harbour in the world and home to the famous Port Royal, at one time among the richest cities in the world.
David and Robert, with MBAs from the University of Miami, are two of the youngest graduates of the school of business. They are also founders of Random Media LLC, an integrated media and entertainment firm that negotiated with YouTube to become it's first Caribbean media partner.
In the past, they have also secured distribution deals with Amazon and Apple for ebooks, been featured in Upstarts - a book by Inc magazine contributing editor Donna Fenn - and asked to speak about access to capital on Capitol Hill in the United States.
All members of the management team and board of directors of Keystone Augusta are Jamaicans.
Keystone Augusta is located at 6000 Metrowest Blvd, Suite 208, Orlando, FL 32835 and can be reached at 407-513-2801.