Business Journalist David Rose says One Great Studio’s initial public offer will be a litmus test of the local market for other companies interested in going to market this year.

Digital marketing agency One Great Studio recently announced that they are trying to raise $338 million on the Jamaican market before listing on the  Jamaica Stock Exchange’s Junior Market.

This is the first IPO since the start of that year.

“The last IPO would have been Image Plus, which closed in December and listed in January. Then we had the unfortunate events of SSL in January,” Rose said while speaking on Taking Stock with Kalilah Reynolds.

He also noted that the high-interest rate environment has made many companies sceptical about the stock market and shy away from listing.

He said many companies will look at the feedback from 1GS’s IPO and use it as a guide.

Meanwhile, the Journalist said he’s confident the IPO will be successful. 

One Great is offering 338 million shares. Half of the shares are reserved for key partners and employees, and the other half for the public; all shares are priced at $1. 

“We’re talking about a market that is still IPO hungry. When some people see the letters I-P-O, they just throw money at it,” he said. 

1GS describes itself as a digital-first marketing company. They offer brand strategy and design services, digital marketing, mobile app and website design and development and search engine optimization. 

They’ve worked with companies like Barita Investments, which is acting as the lead broker and arranger for the IPO as well as Beryllium, Canopy and iProtect. 

According to the prospectus, the company’s revenues grew from J$21 million in 2018 to $240 million in 2022. Their net profit also grew from J$2 million in 2018 to almost J$28 million in 2022. 

The company explained that if the offer is fully subscribed, the bulk of the funds will go towards repaying a $270 million debt owed to Barita. They used the funds to acquire US-based search engine optimization company High Voltage SEO. 

Investment Banking Manager at Barita, Gabrielle Spence, explained that using IPO proceeds to repay a debt is not a bad thing.

She explained that the company took on the debt to acquire a company that contributed some $70 million to its revenue and created a more attractive and profitable company for investors.

The IPO is scheduled to open on August 28 and close on September 18.

However, Rose said he expects it will close earlier, given that investors have been waiting all year for a new offer and were given a longer period to review the prospectus and become familiar with the company. 

The prospectus was released on August 11.