GraceKennedy is selling its majority holdings in Hardware & Lumber (H&L) Limited and has struck a conditional agreement with an unnamed buyer.
The sale includes H&L’s Rapid True Value and AgroGrace businesses. GraceKennedy CEO Don Wehby says GK entered into a conditional agreement on April 22 to sell its 58.1 per cent shareholdings in H&L. The terms of the transaction were not disclosed.
At the time of the agreement, GraceKennedy’s stake in H&L would have been worth $331 million or $7.05 per share. The stock closed yesterday at $10.75 per share.
H&L currently comprises two separate divisions: Rapid True Value, the foremost local supplier of hardware and home-improve-ment products; and the AgroGrace business, a local wholesaler and retailer of agricultural products. The H&L Wholesale operations have now been merged into the Rapid True Value business.
The Rapid True Value chain comprises 10 outlets, along with six AgroGrace retail centres.
Wehby said he was unable to release further details on the pending sale, being bound by a confidentiality agreement, but said the transaction should close within the current financial year. He said the divestment decision was “a strategic one, in keeping with GraceKennedy’s goal of expansion in foods and financial services in Jamaica and internationally.”
H&L is in its post-recovery phase after years of volatile performance. Its sales topped $7 billion last year, but profit declined from $610 million to $217 million. Its assets of $3.3 billion include $1.8 billion of inventory.