Mailpac plans ‘largest’ junior market offering
Published:Wednesday | October 30, 2019 | 12:16 AMKarena Bennett/Business Reporter
Khary Robinson, executive chairman of Mailpac Group Limited, has announced plans to come to market with the “largest junior market offering in Jamaica’s history” for the delivery company later this year.
Details of the initial public offering were not disclosed, but Robinson’s expectation of Mailpac Group’s IPO being the largest share float could mean that the company, which is made up of Mailpac Services and Mailpac Local, is going for the maximum capital raise of $500-million to list on the junior market of the Jamaica Stock Exchange.
Proceeds from the initiative will partly be used to repay a $250-million loan Mailpac Group received from its parent company, Norbrook Equity Partners, over the past two years to revamp the company’s infrastructure, technology, and strategic positioning.
Another portion of funds from the share float will be used to position the company’s balance sheet for future growth.
“All of Norbrook’s businesses have always grown in two ways, organic growth or acquisitions. So we’re either finding ways to grow revenue through new business lines and better technology, or we go and buy competitors. We are also looking to expand this business both locally and regionally,” Robinson told the Financial Gleaner.
“Without saying too much of what’s in the prospectus, what we have to do is, if we have a balance sheet that has debt on it, it is better for us to get rid of that debt so that if we need to pounce on an acquisition or an organic initiative, we have the flexibility to do that,” he continued.
NCB Capital Markets has been selected as lead broker for the IPO.
Mailpac, which was established some 10 years ago as a business under Norbrook Equity, acquired its closest rival, Global Couriers, in 2011. At the time, the acquisition was primarily aimed at giving Mailpac the opportunity to service a broader segment of the online shopping market. Roughly two years later, Mailpac quietly acquired DHL’s Easy Shop.
Today, Mailpac boasts a client base of 50,000 online shoppers across Jamaica and reckons that the planned IPO will further scale up operations.
“With a rapidly crowding ecommerce market, Norbrook decided to make a significant strategic investment in Mailpac Group and its various business lines. The goal was to meaningfully differentiate the company from the many competitors in the space. Accordingly, we eliminated membership fees, reduced rates, and increased our distribution to 11 delivery locations,” Robinson said.
Recently, Mailpac partnered with Aeropost on a number of exclusive technological and infrastructural advancements, including a tracking and customer service app, an exclusive landed price tool and shopping platform, and exclusive technology integration with global leaders in ecommerce such as Amazon, eBay, and FedEx.
Its technology improvements and increased locations have resulted in record growth for the Mailpac Group of 24.6 per cent for the first three quarters of 2019, according to Robinson. He anticipates that the company will hit the billion-dollar revenue mark at the end of the financial year.
Robinson now hopes to secure a larger share of the market with the upcoming launch of the Mailpac Mastercard.
“We’ve partnered with our sister company, Epay, and we are launching the Mailpac Mastercard. It’s a card that customers can put cash on and then use that card to pay online, whether it’s Amazon or Ebay, wherever. Those are the things that we are doing to differentiate ourselves and to allow more people to come into the world of online shopping,” Robinson said.
Incorporated on September 19, Mailpac Group was formed to consolidate the operations of Mailpac Services and Mailpac Local. Mailpac Services, formerly MailPac Express, facilitates online shopping and shipment to Jamaica by offering clients a US shipping/mailing address. The service is complemented by the ability to track packages online, electronic invoicing uploads for customs clearance, and estimation of importation cost. Mailpac Local, on the other hand, offers door-to-door delivery.