UPDATE: Express Catering targets $490m in junior market IPO
Ian Dear's Express Catering Limited aims to raise $490 million from an initial public offering of shares next week on the junior market.
It follows an earlier round of US$3.5 million raised in a preference offer in January to finance, in part, the planned construction of Starbucks outlets at Sangster International Airport.
Under the offer being brokered by Mayberry Investments Limited, Express Catering plans to float 327.5 million units — representing 20 per cent of its 1.63 billion shares.
A tenth of the shares, 32.6 million units, will be available for general public subscription at $1.50. The rest are reserved for key groups.
Express Catering was incorporated in June 2001. Ian Dear is a key shareholder and its chief executive officer.
The Freeport, Montego Bay-based company runs a series of eateries at Sangster Airport, including Jimmy Buffett's Margaritaville, Starbucks, Quiznos, Dairy Queen, Nathan's Famous Hot Dogs, Domino's Pizza, Auntie Anne's Pretzels, Wendy's, Cinnabon, Moe's South Western Grill, Island Deli, Viva Fresh Market Grab & Go, Cricket Sports Bar, Connections Bar, Air Margaritaville Arrivals Bar, Jamaican Bobsled Cafe, The Groovy Grouper and The Bar.
Express Catering's financial year wraps up annually in May. Unaudited results over 10 months ending March 2017 report US$1.15 million net profit on revenues of US$11.1 million.
Total equity in the company was estimated at US$4.6 million. The prospectus indicates that the company's return on average equity has trended downwards, from a high of 50 per cent in 2012 to 37 per cent in 2016.
In January, the company raised US$3.5 million in a seven-year preference share offer in order to earmark funds for the construction of Starbucks Coffee outlets at Sangster Airport in Montego Bay, and to settle other group obligations.
"The company anticipates that construction of its new Starbucks-branded offerings at Sangster Airport will commence within six months and will contribute significantly to revenue in the first full year of their operations, which is expected to occur in financial year 2018," stated the prospectus.
The local franchise for Starbucks was granted to joint venture Caribbean Coffee Traders Limited, in which Ian Dear, through Margaritaville Caribbean Group, and Adam Stewart, deputy chairman and CEO of Sandals Resorts International, are partners.
The preference shares of Margaritaville Caribbean were delisted from the Jamaica Stock Exchange last month. Another Dear-controlled company, Margaritaville Turks, remains listed on the US dollar market of the exchange.
The offer for Express Catering shares will run July 12-19.
CORRECTION: This story has been updated to remove incorrect information that Express Catering will manage the Starbucks Jamaica franchise. It will only operate Starbucks at Sangster Airport.