Derrimon buys 49% of Caribbean Flavours
Derrimon Trading Company Limited acquired a 49 per cent shareholding in Caribbean Flavours and Fragrances Limited (CFF) valued at $121 million, representing a price of $2.75 per CFF share.
The deal, which was executed on August 5, forms part of Derrimon's diversification strategy, Chairman Derrick Cotterel told Sunday Business.
"It's further diversification. Derrimon is going towards consumer and we are looking not to just reach Jamaica but also regionally because there are international stuff that we are looking to do," he said, adding Derrimon is further looking to expand the customer bases of both entities.
"The big issue is really diversification of our portfolio. We see it as a good investment and we think we can add some energy and muscle to the business and make it grow better and give shareholder better value," he said.
CFF produces flavour concentrate and fragrances for the food, beverage, baking, confectionery and pharmaceutical industries.
The share transfer and shareholders agreement was broker by Mayberry Investments, which acts as investment adviser to both companies.
"We are very enthusiastic about this initiative to further the growth of both Derrimon Trading and CFF. We at Mayberry think that this will create a sustainable partnership for the benefit of both companies and their shareholders," Gary Peart, chief executive officer of Mayberry, said in the press advisory announcing the deal.
Derrimon is a distributor of consumer goods to supermarkets and wholesalers islandwide.
"In executing its growth strategy over the years, Derrimon has configured partnerships with global distribution and manufacturing companies that has increased not only the range of products it distributes but also the number of global brands it represents," the company noted in its release.
In addition to its distribution business, the company also provides logistic support, warehouse storage rental, and operates cold-storage facilities as well as the Sampars Cash & Carry wholesale outfit.
"I am very pleased with the progress of CFF since its listing on the Junior Market last September. Less than one year later, the listing has assisted me to identify a long-term strategic partner who shares my values and overall strategic focus," managing director of CFF, Anand James, said.
The deal will result in some changes to the board of directors of CFF, which will now comprise two executive directors from each of the two companies. The three non-executive directors as well as CFF's mentor will remain unchanged.