GK adds M&A Unit - • 10 deals under review • Andrew Leo-Rhynie in charge
Food and financial services group GraceKennedy Limited has made another eight senior management changes, in furtherance of its ambitions towards being a global consumer group that earns the majority of its revenue from overseas holdings.
The conglomerate, which recently put muscle behind its digital transformation initiative and named one of its top strategists, Steven Whittingham, as its head, has now added a mergers and acquisitions or M&A unit to the mix in its hunt for 60 per cent of revenues from foreign markets.
It’s headed by Andrew Leo-Rhynie, the current managing director of GK Capital Management, who is exiting that position. He served as the head of GK Capital for nearly 1½ years, having taken over that position from Steven Whittingham in April 2019.
Leo-Rhynie and his team are said to currently have around 10 M&A prospects under review.
In the other changes announced by Group CEO Don Wehby, Douglas Robinson, who currently holds the post of vice-president of investment banking for GK Capital, has been promoted to acting managing director of that subsidiary; while Lee-Anne Bruce, GK’s current group chief risk and compliance officer, will be appointed chief audit executive.
Judith Chung Gordon will rejoin GK, taking over Bruce’s role as Group Chief Risk & Compliance Officer, and will also assume the role of senior legal counsel, providing legal support to GK’s new M&A Unit. Gerron Thomas, who currently holds the position of business development manager, has been promoted to group risk manager.
Meanwhile, Stacie Ann Wright, the current chief operating officer of First Global Bank, has been appointed chief financial officer of the GraceKennedy Financial Group. Radcliffe Daley, GK’s current chief audit executive, and who previously served as First Global’s vice-president of retail banking and marketing and vice-president of operations, will return to the bank as its chief operating officer.
Margaret Campbell, the country manager of GK Money Services Jamaica, will be promoted to chief operating officer for the GK Money Services Group.
The changes take effect on October 1.
GraceKennedy’s creation of a new merger and acquisition unit comes just two months after the company announced Whittingham as head of a refreshed digital transformation programme that reprioritised and expanded partly due to changing preferences towards online transactions after the outbreak of COVID-19.
Likewise, the creation of the GK M&A Unit was also influenced by COVID-induced changes within the business world, but in an interview with the Financial Gleaner on Monday, Wehby said the businesses being targeted for acquisition have been a part of discussions within the group over the past six months to a year, some predating the coronavirus which broke out in China last December and entered Jamaica in March.
“We have a number of acquisitions that we are currently looking at in the food business inside and outside of Jamaica, and we are looking at businesses in the financial services segment across the eastern Caribbean and Jamaica,” he said.
“So to be sure that we executed well on the strategic alliances, I figured that we need a dedicated unit and someone like Andrew Leo-Ryhnie to lead that team. We have in excess of 10 that we are looking at,” Wehby said.
As Head of Mergers & Acquisitions, Leo-Rhynie will report directly to Wehby. He comes to the table with over 11 years’ experience within GraceKennedy’s financial services businesses.
He and his team will be utilising the services of consultants in assessing targets for acquisitions, whose input must be sought before the unit pitches the transactions to the GK Group Executive, Wehby said.
The Group CEO said some of the targets are at the due-diligence stage, while the conglomerate has already done valuation for others and is now in the negotiation stage.
“For others, we have simply signed a non-disclosure agreement and from there we get information to conduct valuation and due diligence. But we have quite a bit in the pipeline,” he said.
The conglomerate sees the M&A Unit as a growth and performance driver. Its key target is to move the ratio of group revenue earned outside Jamaica from 48 per cent to 60 per cent.
“That doesn’t mean that our revenues in Jamaica are not growing, but what it is saying is that our revenues outside Jamaica are projected to grow faster. We are consistently in the 40 per cent range and we need to ensure that we make the right allocation of capital that we can have sustainable growth in our overseas market,” Wehby said.
GraceKennedy is also looking to leverage its relationship with international partners, which could result in the conglomerate expanding its network of Western Union outlets.
“What happened in the past is that we would have M&A more or less being handled somewhat by the corporate team and some in the various business units. What we have said is if we are going to achieve those targets that we have set, we are going to need a dedicated unit at the corporate headquarters to be focused on these structures,” Wehby said.