Some top executives of Massy Holdings Limited spent most of Wednesday meeting on the sidelines of the premier JSE Capital Markets Conference.
There were back-to-back meetings with institutional investors and banks, including the JMMB Group, the VM Group, and institutional investors such as the National Insurance Fund, and others.
“We’re testing the temperature,” said Massy Group CEO E. Gervase Warner, who is currently overseeing a programme of disposals and acquisitions amid a repositioning of the conglomerate.
The discussions with prospective financing partners focused on the Jamaican market’s appetite for a range of capital-raising options, including equities and debt.
Massy, which will celebrate its centenary this year, has operated businesses in Jamaica for seven decades, but it was only last year that its stock was listed on the Jamaica Stock Exchange The cross-listing of the Trinidad stock was done during the JSE capital markets conference in January 2022.
Warner says now that Massy is in the Jamaican market, they want to tap into the vibrancy of the Jamaica Stock Exchange.
“We see it as an opportunity for international investors to find a place where they could do trades easily because the Trinidad & Tobago environment has made it difficult for international investors to sell their shares and take it back out of Trinidad,” Warner said. He added that the foreign exchange challenge in Trinidad is a well-known impediment.
In addition, Warner said that there is a greater retail investor reach in Jamaica, which provides a wider pool of investors overall.
Three months ago, Massy group named David O’Brien as executive vice-president of global expansion. His job, according to Warner, is “to help the other portfolios identify good (M&A) targets around the world”.
Warner adds that there is no cap on what Massy is willing to spend, and Acting Group Chief Financial Officer Vaughn Martin said the first wave of the expansion effort came in the form of a more than US$240 million commitment to acquire three key companies.
Massy recently announced a US$140 million reacquisition of the IGL LPG and industrial gases business in Jamaica, which is awaiting approval by the Fair Trading Commission. The deal came in the wake of expansion plans for IGL previously announced by General Peter Graham in the midst of a shortage of medical oxygen at the height of the COVID-19 pandemic. Warner said those plans fit well with Massy’s objectives.
“That works perfectly with us because we are in the oxygen business. We are the largest exporter of oxygen in the region. So the plant in Jamaica will just feed into the rest of our oxygen supply chain,” Warner said.
Another proposed US$51 million to US$58 million deal for Air Liquide’s industrial gas operation in Trinidad & Tobago that is awaiting regulatory approval is also facilitating backward integration into the supply of oxygen, nitrogen, and argon gases in the region, he said.
Massy Group turns 100 years old this year. Its businesses, which turn over annual sales revenues of US$1.83 billion, spans the Caribbean, Colombia and South Florida. It recently purchased Rowe’s IGA supermarkets in Jacksonville, Florida, for US$47 million.
“It’s our first beachhead into a larger market. It is a good, well-run group of supermarkets, it’s a manageable size, and it represents a US$47-million bet on a profitable operation,” he said.
Warner says Massy has been in Jamaica for about 70 years. It owns the GasPro cooking gas brand and once owned the Hi-Lo supermarket chain but sold it off to GraceKennedy. Additionally, it sold off its interest in Industrial Gases Limited in the midst of a 1990s cash crunch, according to Warner, and is now in the midst of buying it back, and recently exited the insurance market after selling its regional Massy United insurance holdings.
The conglomerate’s repositioning is to narrow the business’ focus on three main investment portfolios: integrated retail, gas products, and motors and machines.
That is why it divested businesses such as Massy Insurance, Roberts Manufacturing, and Massy Technologies.
“Everything else that we have, if we’re holding on to it, has to be highly strategic,” Warner said as he explained Massy’s continued involvement in remittances, for example.