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Executive Chairman, Mailpac Group, Khary Robinson

Mailpac betting on e-commerce to explode

Executive Chairman, Mailpac Group, Khary Robinson

Norbrook Equity Partners, selling investor in Mailpac Group Limited indicates in its prospectus that it sees the ecommerce industry growing at an even faster rate than in the last decade.

MGL intends to raise $495 million via sale of 500,000 ordinary shares, of which 250,000 are being sold by shareholder Norbrook Equity Partners Limited. The remainder are newly issued shares.

MGL is a recently incorporated company that acquired the businesses, including all the assets and liabilities utilised for operating purposes, of Mailpac Services Limited and Mailpac Local Limited. MGL also acquired the debt owed by Mailpac Services Limited to Norbrook Equity Partners.

“MGL is on the verge of leading an e-commerce revolution in Jamaica. In fact, while online shoppers in Jamaica have jumped from an assumed 0.2 per cent of the adult population in 2010 to approximately six per cent today, this is a far cry from the penetration rates seen globally.”

– Executive chairman of Mailpac Group Limited, Khary Robinson

Norbrook indicates that it restructured the two companies into one because it believes an ecommerce explosion is imminent.

MGL was established and started formally trading on September 30, 2019. The Company offers ecommerce fulfilment services from the United States to Jamaica (under the brand Mailpac Services), cross-border online shopping with local landed prices (Mailpac Marketplace), local online shopping and delivery from local retailers (Mailpac Local), online shopping financing (Mailpac Financial Services), a branded MasterCard for shopping online (The Mailpac Card), sea freight shipping (Mailpac Ocean Freight) and brokerage services.

The company in its prospectus describes itself as the largest e-commerce and logistics company locally measured by its 11 locations and island-wide delivery service.

Executive chairman, Mailpac Group Limited, Khary Robinson
(Photo: Jamaica Observer)

Khary Robinson, executive chairman of MGL, states in the prospectus that Jamaicans who buy into the company will benefit from the pending growth of e-commerce and also the company’s ability to leverage an island-wide network.

He noted, “MGL is on the verge of leading an e-commerce revolution in Jamaica. In fact, while online shoppers in Jamaica have jumped from an assumed 0.2 per cent of the adult population in 2010 to approximately six per cent today, this is a far cry from the penetration rates seen globally.”

Mailpac Services Limited grew from serving approximately 5,000 customers in 2010 to over 50,000 today.

“The purpose of the acquisitions was to amalgamate both e-commerce platforms into one efficient operating business. The acquisitions were executed in a manner that ensured the core operations of both companies remained as is but would benefit from the economies of scale and synergies in being one operating company.”

– Mailpac Group Limited

In 2016, Norbrook Equity Partners also launched Caddiz, an e-commerce platform that allowed local companies to sell their items online and includes shopping for PriceSmart and Hi-Lo.  In 2018, Caddiz was rebranded and established as a stand-alone company, called Mailpac Local Limited.

Norbrook has also  invested in the development of  Mailpac Marketplace, a  cross-border ecommerce platform which allows Jamaican consumers to shop online on key international sites, such as Amazon, and see all items listed with a landed price (in Jamaican dollars and inclusive of shipping and duty cost).

If successful, Mailpac will apply for listing on the Junior Market of the Jamaica Stock Exchange.

Mailpac Services Limited also invested in an instant approval financing platform. The platform allows consumers to finance their online purchases at the point of purchase.  Additional investments were made in securing a tax free address with the Florida Revenue Department, in the island wide distribution network of both companies, in the development of a Mailpac MasterCard, and in several marketing, service, technology and infrastructure projects.

Only 150,000 are immediately available to the public, as up to 300 million shares are reserved for a Financiers Reserve Pool and Key Partner Reserve Pool, priced at $1.00 per share, and up to 50 million shares are reserved for priority applications from an Employee Reserve Pool, priced at $0.90 per share.

Only if any of the Reserved Shares are not subscribed by the persons entitled to them, will they become available for subscription by the general public at the offer price of $1.00 per share

Broker for the offer is NCB Capital Markets which is inviting electronic applications or visits to selling brokers.  The IPO opens on November 22 and closes on December 6, 2019.

The company says if successful in raising this amount, they will apply for listing on the Junior Market of the Jamaica Stock Exchange.

The company has grown over a decade, following the 2010 acquisition of Mailpac  Services Limited by Norbrook Caribbean Investment Company (a  Predecessor to Norbrook Equity Partners Limited) an investment holding company founded by Khary Robinson.

MGL is a recently incorporated company that acquired the businesses, including all the assets and liabilities utilised for operating purposes, of Mailpac Services Limited and Mailpac Local Limited. MGL also acquired the debt owed by Mailpac Services Limited to Norbrook Equity Partners.

The prospectus says, “The purpose of the acquisitions was to amalgamate both e-commerce platforms into one efficient operating business. The acquisitions were executed in a manner that ensured the core operations of both companies remained as is but would benefit from the economies of scale and synergies in being one operating company.”

 Mailpac Services Limited was formed in 1998 as the first international agent to Metropolitan International Services (Aeropost), a technology focused freight forwarding platform based in Miami, Florida.

The company provides an address in the United States where online shoppers in Jamaica could send their purchases  in an effortless process.

The prospectus indicates that over $263M of investments in infrastructure, technology and service offerings of the acquired businesses (funded through two separate financings consummated by Norbrook) has been poured into the company.