Vertex SME Holdings Closes Second Deal with 25% Stake in ICR Holdings   

Vertex SME Holdings Limited (Vertex), the first private equity vehicle managed by JMMB Securities Limited (JMMBSL), has taken a 25% equity stake in ICR Holdings Limited (ICRH).  

This deal comes as part of the recent transaction which facilitated the change of ownership of Island Car Rental (ICR) and Jamaica Rental Company (JRC) to ICR Holdings, making it the parent company, with the acquisition of 100% of the shares in both entities. 

Island Car Rental is one of Jamaica’s leading car rental companies boasting approximately 1500 vehicles in its fleet and offering full-service ground transportation to locals and tourists; private transfers and executive chauffeur services. Additionally, the company recently copped the title of 'Leading Independent Car Rental in the Caribbean' at the World Travel Awards in St Lucia. 
 
Speaking about this latest investment, general manager of JMMBSL, Kareem Tomlinson revealed, “This transaction aligns with our strategy to identify companies with high growth potential, proven business models, strong management teams and sustainable competitive advantages from across a range of industries. Island Car Rental fits this bill, having been in the transportation industry for 50 years and boasts a solid track-record, high cashflow, market dominance and have shown resilience in its operations even during the recent pandemic.” As evidence of this, ICR’s total revenues for the fiscal year ending April 2023 was up 45% year-over-year. With the recovery of tourism, there has been a significant increase in ICR’s profit, which now exceeds pre-pandemic level, although it saw a falloff during the pandemic, as travel was affected globally, and Jamaica saw a 69% dip in arrivals. A positive outlook is also expected as tourism arrivals are forecast to grow significantly, therefore there is room for ICR to increase revenues in line with those arrivals, even without increased market share.

ICR Holdings Limited CEO, Ryan Parkes outlined, “As the company transitions (under new leadership), we will leverage the strength of the brand to pursue a robust revenue growth and diversification strategy aimed at realizing the brand's optimal potential to ensure that Mr. (Michael) Campbell’s legacy lives on.”  Campbell, who served as managing director of Island Car Rental was instrumental in setting a solid foundation for the company and served as a mentor to Parkes, up to his recent passing. 

 

In looking to build on this foundation, ICR Holdings outlined plans to explore expansion, over the short to medium term, in the Caribbean and beyond, through franchising and greenfield opportunities. Parkes shared, "I welcome Vertex’s partnership at this time particularly in light of their extensive experience and expertise within the region. I look forward to leveraging this experience and expertise as we advance Island’s (ICR) growth agenda across new markets." As an equity partner JMMBSL, through Vertex, will look to add value to the company via the appointment of two directors to the board. These directors will add best in class technical expertise in a number of key strategic areas for the company and provide general oversight. The ICRH team will maintain oversight for day-to-day business operations. 

The year-old, private equity vehicle, Vertex SME Holdings earlier this year (May 2023) also announced its minority stake in the Guyanese-based, Corum Restaurant Group Inc. The quick service restaurant group owns and operates the Pizza Hut restaurant franchise in Guyana and continues to exhibit strong growth as they benefit from the economic growth in that country. As the brand continues to grow it is looking to add new franchises to its portfolio.

JMMBSL Supports SME Growth Through Vertex  
In line with the strategic direction of JMMBSL, to bridge the gap of SMEs having ready access to well-structured growth funding and technical expertise, its provides ‘patient” equity funding through Vertex, which is funded by external investors and JMMBSL, as a strong demonstration of JMMB’s commitment to this mandate.
Tomlinson, in outlining Vertex's growth plans, said the private equity vehicle will remain bullish to close more transactions from its robust pipeline, which currently consists of over 20 deals spanning several industries, across Jamaica and the wider Caribbean. “Vertex is currently in advanced stages on a several pipeline opportunities. These companies have tremendous growth potential which we believe can be unlocked with the capital and expertise of the JMMB SL team. As Vertex looks to accelerate its support of more SMEs through equity investment, it is expected to over the short-term return to the capital markets for additional capital raise for deployment in additional opportunities.” 

In touting the value of this private equity vehicle, Keith Duncan, JMMB Group CEO, shared, “Vertex, will add value to the local equity space and its investors by supporting the growth of regional companies and creating the network to forge mutually beneficial partnerships.” In addition to offering more growth funding opportunities for mid-sized businesses, this investment vehicle will enable JMMB Group to diversify its revenue stream and focus on capital efficient growth.