Proven Investments Limited (PIL) is looking keenly at opportunities in the food industry as part of its diversification strategy.
Co-founder and CEO of Proven Management Limited, Christopher Williams told Caribbean Business Report that while the group’s core is in finance, “We see opportunities in enhancing our return on equity and we also see diversification opportunities. Those are the two main reasons why we look at the real sector.”
In the second week of June, PIL closed on the acquisition of a 50.5 per cent interest in Roberts Manufacturing Co. Limited (Roberts) from Massy Properties (Barbados) Ltd.
The acquisition cost was US$21 million.
In its release on the deal, PIL stated that “the acquisition of the stake in Roberts, a leading manufacturer of animal nutrition, edible fats and oils in Barbados supplying diversified consumer goods to markets in the Caribbean, Central America, and the USA, represents for PROVEN a demonstrable success in delivering on one of its value levers for topline revenue growth and will also expand its business in the Real Sector.”
Williams told CBR that the company is looking at another opportunity in the real sector.
“I won’t say specifically which subsector of the real sector,” he said, adding “Our core will always remain financial services. We will maintain our focus, but from time to time we see opportunistic investments that can enhance our return and also provide some diversification for when the financial services markets are tight like now.”
In highlighting the challenges of the financial services market, Williams noted that “Asset prices are high and interest rates are low, so spreads are extremely compressed.”
On the contrary, he noted that there are attractive opportunities in food.
“Because of the food security focus (globally) we see a lot of opportunities in the food real sector, hence the reason we are executing on Roberts. If and when we see others of that nature we will execute on that,” Williams said.
The company head clarified, “Any capital investment we make must meet the current Return On Equity (ROE) metric which is in the region of 15 per cent.
“Any expansion and further expenditure will have to meet that threshold.”
With regards to further investment in Roberts which produces a diverse range of commercial and household food products, he said, “We were presented with some capital expansion plans in the due diligence phase. Now that we have closed the transaction, we are hoping to visit Barbados in two to three weeks and make some decisions.
He noted, “Ansa McAl is our partner in Roberts. It is more a manufacturing conglomerate and so we will be guided by them. More will come out of that meeting as we hear from Asna what strategy execution they would like to embark on.”
He said listing of the Barbados manufacturer in the future is a strong possibility. “It’s a very strong 75 year old company with very strong fundamentals.
Listing is something we will consider. But, it will come out of discussions with our partner Ansa. It’s early days yet, but we see listing as something that would enhance the profile of the business.”
In addition to its real sector acquisition, the company is engaged in closing on two other acquisitions which are Fidelity Bank in Cayman and Heritage Funds, an international education savings vehicle.
“We are now going through regulatory processes,” Williams stated.
CBR understands that Heritage Funds, the Canadian-based programme, has funds under management in the range of US$150 million to US $200 million.
Williams said that Proven continues to execute a very diversified strategy.
“We have a base in financial services with Proven Wealth, The Bank of Boslil, our majority shareholding in JMMB, Fidelity Bank, Heritage Funds and Access Financial,” he said.
The company has also, he noted, built out a very solid brand in real estate.
“We just broke ground on Lady Musgrave Road for a five story commercial property.”
In the real sector, he said, “We are very excited by the opportunities in front of us. The time to invest is when others are panicking. We have been able to stay calm and therefore have been able to pick up some good deals.”
-Caribbean Business Report.