Jamaica Producers’ global connections combined with PanJam Investment’s access to capital will create a powerhouse company able to flex its muscles in various industries, according to Business Journalist David Rose.

Speaking on Taking Stock with Kalilah Reynolds, Rose noted that the merger would allow both companies to take advantage of opportunities locally and globally.

Earlier this week, the companies announced their intention to join forces to create a new group of companies. 

JP, well known for its St Mary’s banana chips brand, has grown over its 90-year history, expanding into shipping and logistics, with a strong presence in Europe.

PanJam has an expansive local real estate portfolio comprising high-end commercial and tourism properties.  

The company also makes private equity investments, with holdings in food manufacturing and distribution, hospitality and business process outsourcing companies.  

Additionally, PanJam has a significant footprint in the financial services industry through its 30% stake in Sagicor Group Jamaica.

According to the terms of the deal, PanJam will acquire all of JP’s operating assets in exchange for JP taking a 34.5% interest in PanJam. 

PanJam, which would be the overall parent company, will be renamed Pan Jamaica Group once shareholders and regulators approve the transaction.

JP will emerge as the largest shareholder of the Group, and the companies have indicated that both the renamed Pan Jamaica Group and JP will remain listed on the Main Market of the Jamaica Stock Exchange. 

History of collaboration

Rose noted JP and PanJam both have proven track records of working successfully together.

“Back in 2011, PanJam and JP came together and put $56 million each into the Mavis Bank Coffee Factory, which produces the Jablum brand,” he said.

“They put in the necessary capital and leadership and were able to exit in 2016, which resulted in them recognising a gain of $650 million each,” he added.

He said that the combination of expertise and brainpower from both companies would create tremendous value for shareholders.

“JP has been around longer and has the benefit of global business relationships versus PanJam which has focused more on private equity and their interest here in the western hemisphere,” he said.

“So by combining these two entities, you’re basically getting a powerful group that will be able to flex its muscles in a diverse range of businesses,” he added. 

Positive market reaction

Senior Research Analyst at JN Group, Fay Samuels, shared similar beliefs. 

She said that the merger would offer more value and a more diverse base to shareholders of both companies. 

She noted that the market reacted positively to the news, with stock prices and volumes soaring after the announcement. 

JP’s stock price, which was hovering around the $17-$18 range since September, jumped to $21.59 on Monday and closed at $22.73 on Wednesday. 

Meanwhile, PanJam’s stock price, which closed trading last week at $52, peaked at $57 following the news.

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