Two financial backers have pumped funds into Khary Robinson’s investment holding company, Norbrook Equity Partners Limited, totalling US$17.5 million ($2.6 billion), which he will use to finance new acquisitions and expansion plans.
Separately, Stratus Alternative Funds SCC–Caribbean Mezzanine Fund II Limited, or CMFII, an investment joint venture between NCB Capital Markets Limited and Eppley Limited, has invested US$12 million in Norbrook through traditional loans and quasi-equity financing; while Sygnus Credit Investments Limited, which provides credit financing to companies, has put up US$5.5 million in the form of convertible preference shares.
The financing is the largest in Norbrook’s history, its founder said, and provides the company with cash to tackle its push into Caribbean and Latin American markets.
But Robinson, whose current operations include courier service Mailpac Group, Hertz rental car franchise, and the chain of Express Fitness gyms, is holding the information close on where he plans to plant the company’s footprint next.
“There is no specific amount being set aside because we have a number of deals in the pipeline. We will allocate on a as needed basis,” he told the Financial Gleaner.
In addition to regional expansion, the funds will also finance working capital needs and enhancements to the current portfolio of companies.
“Firstly, we are incredibly grateful for our financing partners as this investment is an appreciated vote of confidence in Norbrook and our business model,” said Robinson, executive chairman of Norbrook Equity Partners, in a press release.
“More importantly, this investment allows us to deepen our penetration of the Caribbean market, unlocking value from our existing businesses as well as our unique pipeline of opportunities nurtured during the pandemic period,” he said.
Norbrook’s financing arrangement with Sygnus will span three to five years, during which time, Sygnus has the option to convert its preference shares to an equity stake in the holding company and/or its operating subsidiaries across the Caribbean.
But given the nature of Sygnus’ business model, Senior Vice-President of Sygnus Gregory Samuels told the Financial Gleaner that the company would only take up that option in the event of the listing of Norbrook Equity on the stock market, the acquisition or merger of the company, or, in the extreme case, of Norbrook defaulting on its debt payments.
“Because Sygnus is set up as debt fund, not an equity fund, if we do convert it will be an exit … meaning we convert to get the upside and then we exit the transaction, or we might convert and sell it to another party, partner or the issuer,” Samuels said.
Details of Norbrook’s financing arrangement with CMFII and its co-investors were not available up to press time.
Norbrook has built its portfolio of companies over the past decade through an aggressive mix of acquisitions and organic growth initiatives. Its businesses and brands also include Pure National Ice Company; SNB Creative Group (Starlight Productions and Blueprint Events), Norbrook Water Company (JamAgua); and Norbrook Transaction Services (ePay).
The company since 2010, has made over 50 acquisitions in Jamaica, the United States and West Africa.
Norbrook restructured some of its courier operations under a new company, Mailpac Group Limited, prior to listing it on the Jamaica Stock Exchange in late 2019. It’s the only one of the diversified investment company’s businesses known to trade publicly.