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Derrimon APO offer upsized and oversubscribed

Following the announcement early in the new year that Derrimon Trading Company Limited has inked an agreement to buy two companies in New York, the market has responded bullishly to the company’s additional public offer of ordinary shares.

The offer, after being upsized, has been oversubscribed.

A Junior Market-listed company of the Jamaica Stock Exchange, Derrimon is a distributor of dry and frozen bulk commodities. 

(File photo)

In December 2020, the company issued the prospectus inviting the public to subscribe to an offer of ordinary shares, aiming to raise approximately JM$3.50 billion. 

The subscription price was J$2.20 for existing shareholders or Derrimon team members; and J$2.40 for key investors, lead broker’s clients, and non-reserved applicants (General Public).

The offer opened on January 6, 2021, and should have closed on January 26. Net proceeds from the invitation would have been JM$3.29 billion.

On January 25, the company announced that due to excess demand, the board of directors has decided to exercise its option to up-size the invitation from the APO prospectus. 

Accordingly, an additional 301,301,069 in new ordinary shares became available in the invitation.  

Derrimon also advised that the invitation has already been oversubscribed and that the board of directors will not seek an extension to the closing date or time of January 26, 2021.

Expanding overseas

Earlier this month, on Friday, January 8, 2021, Derrimon announced the agreement to secure a controlling stake in FoodSaver New York, Inc (FoodSaver), a wholesale food distributor, and Good Food For Less, LLC (Good Food NY), a specialty supermarket — both Brooklyn, New York-based entities.

The Jamaican company said it has also incorporated a New York subsidiary, Marnock LLC, which will acquire the US-based operations as a going concern. 

(File photo)

The consideration for these acquisitions will be in the form of both cash and shares, with Marnock LLC issuing a 20 per cent minority interest to Oralcrys LLC, an entity beneficially controlled by the former owner-operator of those businesses. 

Derrimon also indicated that the overall consideration upon completion should value between USD$8.9 million and USD$9.1 million. 

Local operations

Locally, in addition to food distribution for several brands and companies, Derrimon also operates a retail division through its seven Sampars Cash ‘N Carry locations. Derrimon also sells its own brand of products under the brand name Delect. 

The company also operates Select Grocers Supermarket located in Upper Manor Park Plaza, in Saint Andrew, pursuant to a joint venture agreement that gives it a 60 per cent ownership interest in the operations. 

Select Grocers Supermarket in St Andrew, Jamaica, is one of Derrimon Trading’s portfolio companies in Jamaica (Photo: Paul Allen/Caribbean Business Report)

Derrimon, additionally, owns approximately 62.02 per cent of Caribbean Flavours and Fragrances Limited (CFF). 

The Jamaican company also owns 100 per cent  of issued share capital of Woodcats International Limited, which manufactures and distributes wooden pallets and other by-products of wood such as mulch and plastic pallets.