JFP inks commercial deal with Total Office
Companies swopping 30% ownership
JFP Limited, a maker of commercial furniture, is working out a deal with Trinidadian office supply company Total Office 2006 Limited that will see the parties acquiring a stake in each other’s company in a cash and shares transaction.
The finalisation of the deal is pending regulatory approval. It will see JFP manufacturing office furniture on behalf of its new partner.
“They’re purchasing 30 per cent of our company and we’re purchasing 30 per cent of their company, said JFP CEO Metry Seaga, while deferring further comment to the deal arranger GK Capital.
“It’s market sensitive information, since it involves a public company, so we’d have to wait until closure for further comment,” said Ryan Strachan, vice-president of investment relations at GK Capital, while affirming that the transaction involves a mix of debt, cash and equity as consideration.
“It will end at around 30 per cent each but may not start there,” Strachan said, adding that some shares were sold last week in facilitation of that deal.
Thirty per cent of JFP would amount to 336 million shares.
On March 15, some 261.414 million JFP shares traded, with the stock closing at $1.50 on the day. There other multimillion-unit trades in the months prior, some of them attributable to company directors, but none of the magnitude of March 15.
Shares in JFP closed at $1.58 on Tuesday, valuing the company at $1.77 billion.
Strachan said shareholder approval may have to be sought for other elements of the deal, and as such there would be no further comment on the transaction.
JFP is a contract furniture manufacturing company that produces a wide array of furnishings and equipment for government agencies, restaurants, and the hospitality industry in Jamaica. Total Office Group is a stationery and office equipment supplier with a distribution network spanning 14 Caribbean territories, according to a release from GK Capital.
“The partnership between JFP and Total Office will create a regional distribution chain for JFP and a manufacturing arm for Total Office, allowing them to expand their product offerings in the Caribbean region and beyond,” the brokerage said.
Seaga said the partnership will give JFP a foothold in the regional office furniture distribution trade.
“It would give us as a company some leverage, in that we’d now be in the distribution trade, since Total Office operates throughout the Caribbean region,” he said.
JFP will continue to stick to its core business of manufacturing office furniture from fibreglass, wood and metal along with upholstering and the provision of solid surfaces for home and office.
Neither company is contemplating a takeover of the other, and they will continue to operate independently, JFP said in a market filing.
JFP Limited, a 37-year-old company based in Kingston, was formerly known as Jamaica Fibreglass Products Limited prior to going public and listing on the Jamaica Stock Exchange last year.
At year ending December, JFP’s preliminary financial report shows a doubling of its annual turnover, from $233 million to $476 million. Yearly profit nearly doubled as well, from $8 million to $15 million, notwithstanding a large loss of $30 million in the fourth quarter.