Diagnostic company is third deal for JMMB’s private equity arm
Published:Wednesday | August 28, 2024 | 12:05 AM
Vertex SME Holdings Limited, a private equity vehicle managed by JMMB Securities Limited, has acquired a 35 per cent equity stake in medical imaging and diagnostic company Erin Radiology.
JMMB declined to comment on cost of the cost of the acquisition, saying both Vertex and Erin are private operations.
Erin Radiology does business in three locations, in Kingston, St Catherine and Clarendon, and also owns and operates a subsidiary company called Kris Radiology.
Jonathan Bair, JMMB Securities’ corporate manager for private equity, said Erin Radiology has provided a range of diagnostic services across its three locations for over a decade.
“Additionally, they have seen significant growth in revenues in the last three years, which underscores its stable financial foundation, and this capital investment will support the company with building out its short to medium-term goals,” he said.
The deal gives Vertex SME Holdings two seats on Erin Radiology’s board.
The current management of Erin Radiology and Kris Radiology will remain in charge of the daily operations.
Walter James, principal of Erin Radiology, said the partnership with Vertex will bolster the company’s capital base, allowing it to fast-track the execution of its growth plans.
“We hope to expand our footprint across the island by either acquiring existing radiology facilities and/or building new ones, while leveraging our strategic alliances,” James said.
He added that the company is looking to broaden its offerings.
“While radiology is currently our primary area of expertise, empirical data shows other specific sub-specialities of medical services that are needed on the island; and with the advancements made in medicine over the years, we hope to bring some of the new cutting-edge services to Jamaica.”
Erin’s immediate plans are focused on increasing its market share in Jamaica, but it remains optimistic about regional expansion over the long term, James said.
Erin Radiology and its subsidiary, Kris Radiology, offers imaging services, including plain X-ray, ultrasound, CT scan, fluoroscopic studies, ECG mammogram, internal medicine consults, cardiac screening, and MRIs, or magnetic resonance imaging.
The deal between Vertex and Erin Radiology was forged with the support of Mayberry Investments Limited, a long-standing financial adviser for the diagnostic company.
Other deals
It’s the third private equity deal closed by Vertex since its inception in 2022, the others involving Corum Restaurant Group Inc, a quick-service restaurant franchise in Guyana, and ICR Holdings, the parent company for Island Car Rentals Company Limited in Jamaica.
Vertex indicated that its investment picks are based on high growth potential, proven business models, strong management teams and sustainable competitive advantage.
“Based on the structure of Vertex, over the medium term we are looking to pursue further value enhancement in the companies in which we have invested. This will see the team working more closely with these companies, so that they can realise their growth potential, and then exit our position as they forge ahead stronger,” Bair said.
Meanwhile, JMMB Securities said the invested companies have made progress since the infusions by Vertex. Corum has begun the expansion of its franchise portfolio with the opening of a new location recently, while ICR Holdings has seen improvement in its operational efficiency and corporate governance structure, in addition to building out its corporate leasing business line, the securities dealer said.
Vertex has two technology companies in its pipeline under consideration for investment and is bullish on closing those deals.
Asked about the small number of companies currently in Vertex’s portfolio, Bair said the private equity firm has a targeted number of portfolio companies in which it aims to invest, but is careful in scrutinising each prospect and only participates in high-quality investments.
JMMB declined to comment on Vertex’s financial performance, saying it was not at liberty to do so.